Affiliated Managers results fall 16%

McDonald's Corp. reported a second-quarter profit that exceeded analysts' estimates by 8 cents a share as it sold more hamburgers in Europe. The Illinois firm reported net income of $1.19 billion, or $1.04 a share, compared with a loss last year. (Mark Lennihan/Associated Press/File 2008)

Affiliated Managers Group Inc. agreed to acquire two money managers, adding to a roster of more than two dozen fund firms as second-quarter earnings declined 16 percent because of lower assets.

The company will buy Bank of New York Mellon Corp.'s stake in Gannett Welsh & Kotler, which manages $7 billion, and in a separate deal will take control of Harding Loevner LLC, a Somerville, N.J., firm with $6 billion of assets. Terms weren't disclosed, Beverly-based Affiliated Managers said.

Net income fell to $35.3 million, or 89 cents a share, from $41.9 million, or $1.04, a year earlier. Cash earnings, which exclude some expenses, were $1.43 a share, beating analysts' estimates. Analysts surveyed by Bloomberg expected an average of $1.42.

Chief financial officer Darrell Crate, speaking on a call with analysts, said he expected 2008 cash earnings of $6.40 to $7 a share, down from the $6.70 to $7.40 forecast in April. The forecast includes a 6-cent impact on earnings this year from the two acquisitions. (Bloomberg)

Teradyne Inc., a maker of equipment used to test electronics, posted a sharply lower quarterly net profit on higher costs and a softening in orders for some products.

Net income for the quarter ended June 29 was $11.1 million, or 6 cents per share, compared with net income of $27.7 million, or 14 cents per share, in last year's second quarter.

Excluding restructuring and other costs, earnings were $28.1 million, or 16 cents per share.

Sales rose 10 percent to $317.7 million from $288.7 million a year earlier.

The North Reading company forecast third-quarter sales of $290 million to $310 million, and earnings, excluding restructuring and other charges, of 10 to 15 cents per share. (Reuters)

Sovereign Bancorp Inc., the second-largest US savings and loan by assets, rose in New York trading after second-quarter profit beat analysts' estimates.

Net income declined 14 percent to $127.4 million, or 22 cents a share, from $147.5 million, or 29 cents, in the same period a year earlier, the Philadelphia-based lender said. Eleven analysts surveyed by Bloomberg expected, on average, profit of 16 cents a share.

Sovereign is trying to reduce risk and simplify its business, and "to the extent we could reduce loans and assets outside of our footprint, we've pushed that along," chief executive Joseph Campanelli said.

Campanelli raised $1.9 billion by selling shares and fixed-rate notes this year after cutting the dividend and recording a $1.3 billion loss at the end of 2007. Sovereign, whose largest shareholder is Spain's Banco Santander SA, curtailed lending and is shrinking its balance sheet as defaults increase.

Sovereign's provision for credit losses was $132 million, more than doubling from $51 million in the second quarter of 2007, "due to continued deterioration in asset quality for the commercial portfolios, particularly in the for-sale housing segment," the lender said. (Bloomberg)

The New York Times Co., the third-largest US newspaper publisher, said second-quarter profit declined 5.5 percent as job cuts and price increases failed to make up for plunging print advertising sales.

Chief executive Janet Robinson said the company is accelerating cost-cutting efforts in the face of a slumping US economy and will exceed a target for $230 million in annual savings by the end of 2009. Robinson also said The New York Times newspaper will raise its weekday newsstand price by 25 cents to $1.50 starting Aug. 18.

June ad sales tumbled 16 percent, the most in at least two years, mirroring the slide reported last week by Gannett Co., the largest US newspaper company. The publishers were hit by a steeper drop in national ads, coupled with a continued decline in classifieds as marketers moved to the Internet.

Income from continuing operations fell to $20.9 million, or 15 cents a share, Times Co. said. Excluding costs to cut jobs, profit of 26 cents beat the 22-cent average of seven analysts' estimates compiled by Bloomberg. Sales dropped 6 percent to $741.9 million, trailing estimates.

Excluding the broadcast business, which it sold in May 2007, the company's profit was $22.1 million, or 15 cents a share, in the year-earlier quarter.

Revenue at the News Media Group, including The New York Times, The Boston Globe, and their websites, fell 6.7 percent to $713.3 million in the second quarter, dragged down by a 12 percent drop in ad sales. Price increases at the flagship newspaper boosted the division's circulation revenue. (Bloomberg)

Shares of Genzyme Corp. fell after the Cambridge company reported positive second-quarter financial results but said plans to increase production of its genetic disorder drug Myozyme could be further delayed, pending a regulatory review.

The company already sells the treatment for Pompe disease, which causes muscle impairment. But it is looking to increase production, and the Food and Drug Administration has deemed the proposed process changes akin to a new formula for the biotechnology drug.

The agency will convene an advisory panel in October to consider the new process.

The company's profit fell in the second quarter, mainly because of a hefty licensing payment to Isis Pharmaceuticals.

Excluding that payment and some other costs, earnings were 98 cents per share, beating Wall Street forecasts by 1 cent.

The 25 percent rise in revenue to $1.17 billion also topped forecasts.

Meanwhile, the company reaffirmed full-year profit guidance, excluding charges, of $3.90 per share, seemingly disappointing Wall Street, which expects $3.94 per share.

Over the next 12 months, Genzyme said it anticipates six potential approvals for new products or broader indications for existing products. (AP)

EMC Corp., the world's largest storage computer maker, surged the most in almost six years after increasing its 2008 sales goal and reporting profit that exceeded analysts' estimates.

Second-quarter net income advanced 13 percent to $377.5 million, or 18 cents a share, EMC said. Sales gained 17 percent to $3.67 billion, beating the $3.56 billion average of estimates compiled by Bloomberg.

The Hopkinton company now expects 2008 sales to exceed $15 billion, signaling that an economic slump in the United States isn't curbing spending on its products.

US revenue rose 10 percent last quarter. Sales from information storage, EMC's largest business, climbed 14 percent.

Net income was $334.4 million, or 16 cents a share, in the year-earlier quarter. Excluding costs such as stock-based compensation and amortization, profit last quarter was 24 cents a share, EMC said.

Analysts on average projected 18 cents.

Reuters reported yesterday that EMC chief executive Joe Tucci hasn't ruled out a possible spinoff of the company's 86 percent stake in virtualization software maker VMware Inc.

"We're committed to optimizing the value of this asset over the long term," Tucci said. "What does that mean? That means we're going to optimize this asset. That doesn't mean you spin it or you won't spin it. It just means we are going to optimize this asset and make sure that the shareholders get value over the long term."

Later, an EMC spokesman said the company has no plans to spin off VMware at present. (Globe staff and wire services)