Earnings: eBay | Apple | Motorola | Intel | Southwest | Bank Of America | J.P. Morgan Chase |

EBay Meets Earnings Forecasts, Reaffirms Conservative Outlook

SAN FRANCISCO (Reuters) - Web auction leader eBay Inc. (EBAY) Wednesday posted quarterly results that matched Wall Street estimates but confirmed fears that growth is slowing as the company hewed to its conservative outlook.

Executives said eBay was introducing its first-ever share buyback of up to $2 billion of stock over two years, even as they spelled out plans to increase the volume of sales in its core auction business by raising prices of some listings.

Shares of eBay, which have been on a relentless slide so far this year -- plunging 41 percent -- gained 3.8 percent to $26.93 in post-market trading following the report, as investors appeared to take heart from the share repurchase.

"We continue to grow faster than e-commerce in virtually all of our markets," President and Chief Executive Meg Whitman said in an interview.

"E-commerce is slowing down a bit. I think that with the changes we are making we can actually do better," she said.

Net profit for the second quarter dipped 14 percent to $250.0 million, or 17 cents per diluted share, compared with $291.6 million, or 21 cents a share, in the year-earlier quarter. The latest quarter's profit was in line with Wall Street expectations, according to Reuters Estimates.

Apple Profit Rises 48% on iPod Sales

SAN FRANCISCO (Reuters) - Apple Computer Inc. (AAPL) Wednesday posted a 48 percent increase in quarterly net income as it sold more iPod digital music players and Intel Corp.-powered Macintosh computers.

Apple said net income for its fiscal third quarter, ended July 1, rose to $472 million, or 54 cents per share, from $320 million, or 37 cents per share, a year earlier. Revenue rose 24 percent to $4.37 billion from $3.52 billion.

Analysts expected Apple to earn 44 cents per share, on average, within a range of 40 cents to 49 cents, on revenue of $3.68 billion, according to Reuters Estimates.

While sales of iPods are still rising at a respectable clip, concerns of a slowing sales growth rate have arisen in recent months, and shares of Apple are down some 24 percent since early May.

Based on Tuesday's closing prices, Apple shares so far this year have declined 26 percent, compared with an 12 percent decline in the Morgan Stanley High Technology Index, of which Apple is a component. Apple stock more than doubled in 2005, after tripling in 2004, largely on booming sales of the iPod.

Motorola Posts Higher Quarterly Profit

NEW YORK (Reuters) - Motorola Inc. (MOT), the world's second biggest cellphone maker, said Wednesday its second-quarter earnings and revenue rose on a tax benefit and a legal settlement as well as strong demand for its cellphones, including its flagship Razr phone.

The Schaumburg, Illinois-based company posted earnings of 55 cents a share compared with 37 cents a share in the year-ago quarter. Revenue rose 29 percent to $10.88 billion from $8.41 billion.

Motorola said earnings from continuing operations were 54 cents a share, including a 21 cent benefit from unusual items such as tax benefits and a litigation settlement.

Analysts, on average, had expected earnings of 29 cents a share on revenue of $10.12 billion, according to Reuters Estimates.

The analysts' forecast was comparable to Motorola's reported earnings per share from continuing operations, excluding special gains, of 31 cents, according to Reuters Estimates.

Motorola forecast third-quarter revenue of between $10.9 billion and $11.1 billion.

Motorola said it sold 51.9 million handsets in the quarter and that its share of the cellphone market rose to 22 percent from 21 percent in the first quarter.

Motorola shares traded at $19.28 in after-hours trade on Inet after closing up 37 cents at $19.25 on the New York Stock Exchange.

Intel Posts Sharply Lower Q2 Profit

SAN FRANCISCO (Reuters) - Intel Corp. (INTC), the world's biggest chipmaker, on Wednesday posted a sharply lower second quarter profit amid fierce competition from rival Advanced Micro Devices (AMD) Inc.

The technology heavyweight also said it expected sales for the third quarter to be between $8.3 billion and $8.9 billion, lower than the average analyst expectation of $9.03 billion, according to Reuters Estimates.

Net profit for the second quarter was $885 million, or 15 cents per share, compared to $2.04 billion, or 33 cents per share a year earlier.

Excluding stock-based compensation, Intel said it earned $1.12 billion, or 19 cents per share, compared with $2.04 million a year earlier.

On that basis, Intel had been expected to show a profit of $808 million, or 13 cents per share, according to the average analyst forecast on Reuters Estimates.

Revenue in the second quarter was $8 billion, down from $9.23 billion a year earlier and below the average forecast of $8.23 billion.

Southwest Airlines Profit Booms

NEW YORK (Reuters) - Southwest Airlines Co. (LUV) Wednesday said its second-quarter earnings more than doubled as the leading U.S. discount carrier overcame rising jet fuel costs with higher fares and aggressive hedging.

Southwest, the No. 1 U.S. airline by market value, said net profit for the three months ended June 30 rose to $333 million, or 40 cents a share, compared with $144 million, or 18 cents a share, in the same period a year earlier.

Excluding special items, the Dallas-based company posted earnings of 33 cents a share. The average forecast from analysts polled by Reuters Estimates was 26 cents a share.

Operating revenue rose 26 percent to $2.45 billion from $1.94 billion.

Earnings were boosted by gains from Southwest's jet fuel hedging program, which has allowed the airline to secure prices at favorable rates. Southwest said the program generated a cash benefit of $225 million in the quarter.

The airline, which said it is 73 percent hedged through the remainder of 2006, expects its fuel costs to be higher than the second quarter's rate of $1.42 a gallon and substantially higher than the 95 cents a gallon paid in the third quarter last year. Jet fuel currently costs over $2.20 a gallon.

Southwest's hedging program has been credited with helping the airline maintain its low airfares despite rising fuel costs. But the expiration of some of its hedging contracts has exposed the airline to higher costs.

The company has responded with higher fares, which have given rivals room to raise rates as well and improved the outlook for the struggling airline industry.

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Bank of America Profit Rises 18 Percent

NEW YORK (Reuters) - Bank of America Corp. (BAC), the No. 2 U.S. bank, on Wednesday said second-quarter profit rose 18 percent, as consumer and small business banking earnings doubled.

Net income for the Charlotte, North Carolina-based company rose to $5.48 billion, or $1.19 per share, from $4.66 billion, or $1.14, a year earlier.

Excluding merger and restructuring costs, profit totaled $5.60 billion, or $1.22 per share. Analysts polled by Reuters Estimates on average forecast profit of $1.10 per share.

Total revenue rose 25 percent to $18.23 billion, while noninterest expense rose 24 percent. Analysts on average expected revenue of $17.7 billion.

Net interest margin, or the difference between what the bank earned on loans and paid on deposits, fell to 2.85 percent from 2.98 percent in the first quarter. Many banks have reported declines.

"We offset the difficult interest rate environment with great execution in every line of business, leading to a significant increase in fee income," Chief Executive Kenneth Lewis said in a statement.

Consumer and small business banking profit doubled to $3.11 billion, while profit in corporate and investment banking edged up to $1.72 billion. Earnings in wealth and investment management rose 14 percent to $634 million.

Bank of America shares closed Tuesday at $48.44 on the New York Stock Exchange. The shares have risen 5 percent this year, compared with a 3 percent increase in the Philadelphia KBW Bank Index.

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J.P. Morgan Chase Profit Leaps

NEW YORK (Reuters) - J.P. Morgan Chase & Co. (JPM), the No. 3 U.S. bank, Wednesday said second-quarter profit tripled, bolstered by investment banking and credit card income growth.

Net income increased to $3.5 billion, or 99 cents a share, from $1.0 billon, or 28 cents a share, a year earlier, when it recorded a litigation reserve charge of $1.2 billion after taxes, or 33 cents a share.

Net revenue for the New York-based bank jumped 19 percent from the year-ago period to $14.9 billion, though it was down about 1 percent from the first quarter.

Per-share earnings were 92 cents after stripping out one-time gains from private equity, litigation insurance recoveries, the sale of shares in credit card association MasterCard Inc.'s initial public offering, as well as Treasury portfolio expenses and merger costs.

Analysts, on average, expected earnings of 87 cents a share, excluding one-time items, on revenue of $15.35 billion, according to Reuters Estimates. Per-share earnings were up about 48 percent on a comparable basis.

J.P. Morgan's hard-charging Chief Executive Jamie Dimon has been pushing to realize long-promised cost savings from the bank's $60 billion acquisition in 2004 of Bank One, where he had been CEO.

Dimon noted in a statement that earnings had benefited from "the extremely favorable consumer and wholesale credit environment, which is not expected to continue."

Net income at its investment bank rose 37 percent to $839 million on a 52 percent gain in revenue.

Net income from credit card services rose 61 percent to $875 million, even as revenue slid 6 percent.

The shares have gained 2.6 percent so far this year, about in line with the KBW Bank stocks index as higher interest rate expectations and slumping markets have dampened expectations for a strong turnaround at the bank.

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