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CORPORATE EARNINGS/ MAJOR FIRMS AND LOCAL EMPLOYERS

Microsoft Corp. said its fiscal first-quarter earnings rose 11 percent, beating analysts' expectations, as the software company benefited from stronger-than-expected computer and server shipments. But shares in the company fell in after-hours trading Thursday as analysts expressed concern about the prospects for long-term corporate contracts. For the three months ended Sept. 30, the company reported earnings of $2.90 billion, or 27 cents per share, compared with earnings of $2.61 billion, or 24 cents per share, a year earlier.

Google Inc. exceeded analyst expectations in its first quarterly earnings report as a public company, propelled by a continued surge in online advertising distributed by its Internet-leading search engine. The company said it earned $52 million, or 19 cents per share, during the three months ended in September. That compared to $20.4 million, or 8 cents per share, at the same time last year. The results, marking Google's first quarterly review as a public company, included one-time charges to account for stock-based compensation and a previously announced settlement of a patent dispute with rival Yahoo Inc.

Amazon.com Inc., the world's No 1 Internet retailer, said third-quarter earnings more than tripled as it boosted international sales and offered more goods from other merchants. The company forecast 2005 sales will trail analysts' estimates, sending its shares lower. Profits rose to $54.1 million, or 13 cents a share, from $15.6 million, or 4 cents, a year earlier.

Visteon Corp., the nation's second-largest auto supplier, said it lost $1.36 billion in the third quarter, primarily from a one-time charge for deferred tax assets, and warned of challenging conditions ahead. The loss amounted to $10.86 a share, versus a net loss of $168 million, or $1.34 a share, in the year-ago quarter.

Wendy's International said earnings for the third quarter were up more than 4 percent, partly because of increased sales at its Wendy's and Tim Hortons restaurants. The company also lowered its 2004 earnings expectation again. Wendy's reported profits of $69.1 million, or 60 cents per share, matching the mean forecast of analysts surveyed by Thomson First Call. A year ago, the company earned $66.3 million, or 58 cents per share.

SBC Communications reported that its third-quarter earnings jumped 75 percent, with the increase coming largely from the company's sale of its phone book publishing operation for Illinois and Indiana. The San Antonio-based telecommunications giant had earnings of $2.1 billion, or 63 cents per share, compared with a profit of $1.2 billion, or 37 cents per share, a year ago.

Xerox Corp. reported that third-quarter profits increased 39 percent, citing strong sales of new products and demand for document services. The maker of copiers and printers said it earned $163 million, or 17 cents per share, compared with $117 million, or 11 cents per share, a year ago.

Merck & Co. profits plunged in the third quarter in the wake of the recall of its Vioxx arthritis drug. Merck said its profits slumped 29 percent to $1.33 billion, or 60 cents per share, from $1.86 billion a year earlier. Revenues for the quarter fell 4 percent to $5.54 billion from $5.76 billion a year earlier.

Mired in a deepening retail slump, Sears, Roebuck and Co. reported a $61 million third-quarter loss and warned that 2004 earnings will be lower than expected following back-to-school and fall sales that were even weaker than usual. The loss amounted to 29 cents per share, compared with net earnings of $147 million, or 52 cents per share, for the same period in 2003. Analysts surveyed by Thomson First Call had expected a penny-per-share profit. Revenues declined 15 percent. Sears also lowered its estimate for 2004 earnings to between $1.46 per share and $1.66 per share, anticipating flat same-store sales - sales at stores open at least a year - in the fourth quarter. That's far below the $2.70-a-share estimate of analysts.

AT&T Corp. lost $7.12 billion in the third quarter as the company absorbed its jolting retreat from the consumer local and long distance telephone business. The loss of $8.95 per share AT&T reported was largely the result of a charge of $12.47 billion to write down the book value of AT&T's telephone network now that it's expected to generate far less revenue. Excluding the charges and a related tax benefit of $4.38 billion, AT&T would have reported a profit of $262 million, or 33 cents a share. A year ago, AT&T earned $418 million.

The Coca-Cola Co. reported a 24 percent drop in third-quarter profit on flat revenue, but beat analysts reduced expectations that were tempered after the beverage giant's previous warnings. Coke said it earned $935 million, or 39 cents a share, compared to a profit of $1.22 billion, or 50 cents a share, a year earlier. Excluding one-time items - 11 cents in reductions due to charges and tax adjustments - Coke said it earned $1.22 billion, or 50 cents a share. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 47 cents a share.

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