BUSINESS BRIEFS
Google's profits below predictions for 2nd quarter
Advertiser Staff and News Services
SAN FRANCISCO — Google Inc.'s earnings growth slowed more than investors anticipated during the second quarter — an indication the sluggish U.S. economy is starting to weigh on the Internet search leader. The results released after the stock market closed caused Google shares to plunge by about 7 percent.
Google earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925.1 million, or $2.93 per share, at the same time last year.
If not for costs incurred for employee stock compensation, Google said it would have earned $4.63 per share. That figure missed the average estimate of $4.74 per share among analysts surveyed by Thomson Financial.
MICROSOFT PROFITS JUMP 42 PERCENT
SEATTLE — Microsoft Corp. said yesterday its fiscal fourth-quarter profit jumped 42 percent, helped by strong sales of its Office and Windows software, but investors sent shares down on disappointing first-quarter guidance.
Earnings for the three months ended June 30 rose to $4.3 billion, or 46 cents per share, but that missed Wall Street's expectations by a penny per share. In the year-ago quarter, Microsoft reported earnings of $3 billion, or 31 cents per share.
CONSTRUCTION OF NEW HOMES FALLS
WASHINGTON — A beat-the-deadline rush to file permits for apartment construction in New York City lifted housing starts to unexpectedly high levels in June, but it was no cause for rejoicing. Construction of single-family homes nationwide fell to the slowest pace in 17 years.
Builders started work on single-family homes at an annual rate of 647,000 units last month, a drop of 5.3 percent from the previous month, the Commerce Department reported yesterday. It marked the slowest pace for singe-family activity since January 1991, another period when housing was going through a severe downturn.
JPMORGAN TOPS MOST FORECASTS
NEW YORK — The banking sector looked a little brighter for a second straight day yesterday after JPMorgan Chase & Co. reported better-than-expected results despite a spike in mortgage and other loan defaults.
The bank's shares gained more than 13 percent yesterday after it reported a 53 percent drop in profit. Following Wells Fargo & Co.'s stronger-than-expected results released Wednesday, investors appear more confident that the banking sector will be propped up by some of its healthier players.
However, JPMorgan Chase, like its weaker competitors, still has a tough environment to slog through. Even the bank's more creditworthy borrowers are now failing to make their mortgage payments.
MERCK TO BEGIN VIOXX PAYOUTS
TRENTON, N.J. — Merck & Co. will start cutting checks for former users of its withdrawn painkiller Vioxx next month after announcing yesterday that it will fund a $4.85 billion settlement expected to resolve roughly 50,000 lawsuits.
The decision marks the beginning of the end of the four-year legal saga, which began when cardiovascular side effects forced Merck to pull Vioxx off the market in 2004, triggering tens of thousands of lawsuits.
