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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Google Revenues, Profits Rise; IBM's Bumps Margins; Foreclosures Up as Well as Single-Family Homebuilder Confidence; Initial Unemployment Claims Fall to Lowest Level Since January; Sun Shareholders Approve Oracle Merger;
- Google Inc. (Nasdaq: GOOG) saw its revenue grow 3% in its second quarter, which ended on June 30. The Internet search giant reported a net income of $1.4 billion, or $4.66 per diluted share on revenue of $5.5 billion. That compares to a net income of $1.2 billion, or $3.92 per diluted share on revenue of $5.3 billion in the same quarter last year. "These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs," said Eric Schmidt, Google's chief executive officer. Ad revenues accounted for 97% of Google's revenue. The company was able to maintain its 65% market share for searches amid increasing competition from Microsoft Corp.'s (Nasdaq: MSFT) Bing search engine, which launched in early June.
- International Business Machines Corp.'s (NYSE: IBM) second quarter profit grew 12%, but revenues fell 13%, the company said yesterday (Thursday). IBM's net income was $3.1 billion, or $2.32 per diluted share on revenue of $23.2 billion for the quarter ended June 30. That compares to a net income of $2.8 billion, or $1.97 per diluted share on revenues of $26.8 billion in the same quarter last year. Shares of IBM were up 1.46% in after hours trading on the news.
- Foreclosure filings in the United States jumped to a record 1.9 million on more than 1.5 million properties in the first half of 2009, according to RealtyTrac. "Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac said in an interview with Reuters. "I don't think this suggests the economy is any worse than anyone expected but I certainly don't think it shows by itself any signs of improvement." In related real estate news, builder confidence for newly built single-family homes grew by two points to 17 this month, its highest level since September according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. Still, the index was well below 50, the threshold for which builders view the market conditions as good. "Builders are seeing slightly better sales conditions this month as consumers take advantage of the first-time buyer tax credit, low interest rates and attractive home prices, but many remain quite concerned about the road that lies ahead," said NAHB Chairman Joe Robson, who is himself a builder from Tulsa, Okla.
- Initial unemployment benefit claims in the United States fell by 47,000 to 522,000 for the week ended July 11, to their lowest level since January, according to the Department of Labor. The less volatile four-week moving average also shrank, falling by 22,500 to 584,500. "The annual auto retooling shutdowns almost certainly explain the sudden dive in claims," Ian Sheperdson, chief economist at High Frequency Economics told the Financial Times. "The shutdowns happen every year but GM and Chrysler started early this year."
- Lawmakers in Washington yesterday (Thursday) BAC) as it was about to merge with Merrill Lynch, Dow Jones Newswires reported. Paulson defended the U.S. government's response to the financial crisis and his role in ensuring Bank of America closed its acquisition of Merrill Lynch, but took a verbal drubbing on Capitol Hill, mostly from those who voted against the Troubled Asset Relief Program (TARP). "I don't think anyone's buying what you're saying," said Rep. Dan Burton, R-Ind. "The biggest, most powerful bankers have essentially received a free ride at taxpayers' expense," Rep. Dennis Kucinich, D-Ohio, added. and looking the other way as major mistakes were made at Bank of America (NYSE:
- Sun Microsystems Inc. (Nasdaq: JAVA) shareholders approved the sale of the company to Oracle Corporation (Nasdaq: ORCL) for $9.50 per share in cash Sun said yesterday (Thursday) in a statement. Roughly 62% of the outstanding shares of Sun's stock voted in favor of the merger. The deal represents a total of $7.4 billion, or $5.6 billion of Sun's cash and debt.