Intel reports 12% drop in 1st quarter

Intel Corp., the world's biggest chip maker, reported a 12 percent drop in profit on costs to spin off a business. Sales this quarter may top analysts' estimates as the company takes customers from Advanced Micro Devices Inc.

First-quarter net income declined to $1.44 billion, or 25 cents a share, from $1.64 billion, or 28 cents, a year earlier, Santa Clara, Calif.-based Intel said. Intel spent $300 million in the period to shed a money-losing business. Sales gained 9.3 percent to $9.67 billion.

The sales forecast reassured investors that the market for personal computer chips hasn't stalled. Advanced Micro, Intel's biggest rival, said last week its first-quarter sales were about $1.5 billion, missing its projections. Some analysts were concerned that the slump had struck the whole industry, rather than just Advanced Micro.

Second-quarter sales will be $9 billion to $9.6 billion, Intel said. Analysts surveyed by Bloomberg estimated sales of $9.25 billion. (Bloomberg)

Johnson & Johnson, the maker of everything from Listerine mouthwash to Tylenol pain medicine, said profit rose 40 percent on sales of the Zyrtec allergy pill, foreign exchange gains, and the absence of year-earlier costs.

First-quarter net income jumped to $3.6 billion, or $1.26 a share, the New Brunswick, N.J., company said. J&J fell after analysts said profit was affected more by $807 million in acquisition-related charges recorded a year ago and currency rates than by drug sales.

Revenue from Zyrtec, Sudafed cold pills, Nicorette smoking-cessation gum, and Listerine, all gained in the December 2006 purchase of Pfizer Inc.'s consumer unit, helped J&J weather a 23 percent drop for the anemia drug Procrit and a 24 percent decline for the Cypher stent, both tied to higher heart risks.

Excluding costs, earnings beat the $1.20 estimate of 17 analysts surveyed by Bloomberg. J&J raised its 2008 earnings forecast to $4.40 to $4.45 a share, from a January projection of $4.39 to $4.44, excluding research and development charges or other special items. (Bloomberg)

Charles Schwab Corp., the largest online brokerage by customer assets, said first-quarter profit rose 29 percent as clients opened the most accounts in almost seven years.

Net income climbed to $305 million, or 26 cents a share, the San Francisco-based company said. That compares with a year-earlier profit of $236 million, or 19 cents, excluding the U.S. Trust unit sold in July.

Schwab gained 246,000 new accounts after increasing its advertising spending and introducing new mutual funds. Investors added $41.3 billion in net new assets to their accounts during the quarter, the most since the peak of the Internet bubble in March 2000, even as the Standard & Poor's 500 index tumbled during the quarter to a 19-month low.

Revenue was $1.31 billion as new accounts increased 27 percent from the year-earlier period. Schwab was expected to earn 26 cents a share on revenue of $1.32 billion, according to the average estimate of 17 analysts surveyed by Bloomberg. (Bloomberg)

Washington Mutual Inc., the savings and loan that got a $7 billion capital infusion, posted its second straight quarterly loss as more customers fell behind on their mortgages.

The lender's first-quarter loss equaled $1.14 billion, or $1.40 a share, compared with profit of $784 million, or 86 cents a year earlier, the company said. Seattle-based Washington Mutual posted a $1.87 billion deficit in last year's fourth quarter.

Chief executive Kerry Killinger diffused some investor concern about the lender's health yesterday by closing the deal to raise new capital from a group led by David Bonderman's TPG Inc. He may still have to quell dissent from shareholders unhappy with a 74 percent drop in WaMu's stock over the past year and dilution caused by the TPG investment. (Bloomberg)

U.S. Bancorp said first-quarter earnings fell 3.5 percent as the lender set aside more to cover soured home loans.

Net income declined to $1.09 billion, or 62 cents a share, from $1.13 billion, or 63 cents, in the year-earlier period the Minneapolis lender said. The average estimate of 6 analysts surveyed by Bloomberg was 63 cents.

Chief executive Richard Davis is trying to revive profit growth after the bank missed earnings targets last year, depriving him of a bonus during his first year in the job. The bank more than doubled its expense for failed loan reserves in the quarter to $485 million, from $177 million a year earlier, as the worst US housing slump in more than a quarter century deepened.

The bank also took a $253 million charge on so-called structured investment securities it bought last year to shore up a mutual fund managed by a unit. The money market fund faced losses threatening the $1-a-share price promised to investors. (Bloomberg)