Microsoft profit rises 7 percent

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Microsoft Corp.'s fiscal fourth-quarter profit edged up 7 percent despite a hefty charge to cover the cost of defective Xbox 360 video game consoles.

The world's largest software maker said its earnings for the three months ended June 30 climbed to $3.04 billion, or 31 cents per share, from $2.83 billion, or 28 cents per share, during the same period last year.

Results were weighed down by a charge of $1.06 billion, or 8 cents per share, related to the video game console repairs.

In early July, the company said it would extend the warranty on the Xbox 360 to three years after too many succumbed to "general hardware failure." The software maker said it has fixed problems in the manufacturing process, but would not give details.

Excluding this charge, Microsoft would have earned 39 cents per share, in line with Wall Street's expectations, according to Thomson Financial.

Revenue climbed 13 percent to $13.37 billion from $11.80 billion last year, just ahead of Wall Street's estimate of $13.27 billion in sales. (AP)

Bank of Americarecords 5.2% gain

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Bank of America Corp., the second-largest US bank, said profit rose 5.2 percent, surpassing analysts' estimates, on private-equity gains and investment-banking revenue.

Second-quarter net income rose to $5.76 billion, or $1.28 a share, from $5.48 billion, or $1.19, a year earlier, the Charlotte, N.C., company said. Analysts were estimating profit of $1.20 per share.

Chief executive Kenneth Lewis is convinced the United States represents the best opportunity to expand the bank's businesses even as Europe and Asia grow faster. Bank of America's profit increase trailed JPMorgan Chase & Co., which gets a quarter of its revenue overseas.

Revenue increased 7.8 percent to $20 billion, exceeding analysts' average estimate of $18.7 billion. (Bloomberg)

Google misses analysts' estimates

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Google Inc. said second-quarter profit rose 28 percent, less than analysts estimated, after the company boosted research spending and hired more workers than planned.

Net income climbed to $925.1 million, or $2.93 a share, from $721.1 million, or $2.33 a share, a year earlier, the Mountain View, Calif.-based company said. Sales rose 63 percent to $2.72 billion. Excluding stock-based compensation costs, profit was $3.56 a share, missing the average estimate of $3.57 in a Bloomberg survey of analysts.

Research spending soared 88 percent last quarter as the company sought improvements to its search engine and online services. Google, the world's largest Internet search company, opened a Tel Aviv research center in June, adding to its 10 labs in Europe, the Middle East, and Africa. Spending on overhead and marketing also outpaced sales growth.

"They are basically spending money to build the business, and earnings can't always go up exponentially," said Piper Jaffray analyst Gene Munster. He rates the shares "outperform" and does not own any. (Bloomberg)

Sycamore files 3 period reports

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Sycamore Networks Inc. filed financial reports for the first, second, and third quarters that were delayed by a stock options review.

The company reported net income for the third quarter ended April 28 of $6.7 million, or 2 cents a share, down from $10.5 million, or 4 cents a share, for the same quarter in the previous year, according to a Securities and Exchange Commission filing.

Net income for the second quarter ended Jan. 27 was $3.35 million, or 1 cent a share, down from $5 million, or 2 cents a share, for the same quarter in the prior year, the filing said.

And the Chelmsford networking systems company swung to a first-quarter loss of $17.1 million, or 6 cents a share, from a profit of $6.85 million, or 2 cents a share, for the same period in the previous year, the filing said.

The company's first quarter ended Oct. 28, 2006.

Sycamore Networks said by filing the late reports it now believes it's in compliance with SEC reporting requirements and believes it has complied with rules for continued listing on Nasdaq.

However, it's waiting on confirmation from Nasdaq, the company said. (Dow Jones)

Reducing costs lifts TD Ameritrade

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TD Ameritrade Holding Corp., an online broker facing shareholder pressure to merge with a rival, boosted profit 14 percent in the third quarter by reducing costs as customers traded less.

Net income rose to $158.7 million, or 26 cents a share, in the quarter ended June 30, from $139.8 million, or 23 cents, a year earlier, TD Ameritrade said.

The Omaha-based company was expected to earn 25 cents, the average of 13 analyst estimates compiled by Bloomberg.

Revenue climbed less than 1 percent, the slowest in more than two years. (Bloomberg)

Advanced Micro cuts lead to loss

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Advanced Micro Devices Inc., the second-largest maker of personal-computer processors, reported a second-quarter loss after cutting prices to compete with Intel Corp.

The loss was $600 million, or $1.09 a share, compared with a profit of $88.8 million, or 18 cents, a year earlier, the Sunnyvale, Calif.-based company said.

Excluding some items, the loss was 85 cents a share, meeting the average loss projected by analysts.

Sales rose 13 percent to $1.38 billion. Analysts had estimated sales of $1.25 billion. (Bloomberg)