Microsoft said Thursday that an accounting adjustment to reflect a weak online ad business led to its first quarterly loss in its 26 years as a public company.
The software company had warned that it was taking a $6.2 billion charge because its 2007 purchase of online ad service aQuantive hasn’t yielded the returns envisioned by management. The non-cash adjustment is something companies do when the value of their assets decline. Microsoft Corp. paid $6.3 billion for aQuantive, only to see rival Google Inc. expand its share of the online ad market.
The charge led to a $492 million loss in the April-June quarter, or 6 cents a share. That compares with earnings of $5.9 billion, or 69 cents, a year ago. Revenue rose 4 percent.
Verizon’s income up; broadband hits wall
Verizon Communications Inc., parent of the country’s largest cellphone carrier, on Thursday said its net income rose 13 percent in the second quarter as its wireless arm pulled in record profits.
Verizon has one foot in the wireless world and one in the traditional, wired phone-company world. Like other phone companies, Verizon is losing landlines, but it is compensating to some extent by signing up broadband customers. In the second quarter, that trend faltered, as it gained just 2,000 broadband customers – the worst result in four years.
Chief Financial Officer Fran Shammo said the weak showing was in part due to Verizon ending the sale of DSL connections to people who don’t have a landline phone account.
Overall, Verizon earned $1.83 billion, or 64 cents a share, in the April to June period, up from $1.61 billion, or 57 cents a share, a year ago.
IAB earnings rise a robust 11 percent
Independent Alliance Banks Inc. on Thursday reported second-quarter earnings of $2.25 million, or $1.64 per common share, an 11 percent increase over the $2.03 million, or $1.47 a share, posted for the same three months of 2011.
Fort Wayne-based IAB is a two-bank holding company for Grabill Bank and MarkleBank.
Mike Marhenke, IAB’s president and CEO, described the company’s performance as “consistently strong.”
IAB reported total assets of $948 million as of June 30, a 2 percent decline compared with last year’s second quarter.
Fifth Third profit surges 15 percent
Fifth Third Bancorp says its second-quarter net income rose 15 percent on a sharp drop in write-offs related to unpaid loans.
Cincinnati-based Fifth Third says net income rose to $376 million, or 40 cents a share, for the three months ended June 30. That compared with earnings of $328 million, or 35 cents a share, in the year-ago quarter.
The results beat analysts’ average forecast for 35 cents a share, according to data provider FactSet.
AMR, US Airways study merger options
The CEOs of American Airlines parent AMR Corp. and US Airways met over breakfast Thursday to talk about potential merger scenarios.
AMR’s Thomas Horton told US Airways’ Doug Parker that he won’t be rushed into any deals, a person familiar with the discussion said.
US Airways Group Inc. said it hoped the meeting was the start of a process in which it can show the benefits of a merger.
