Business Highlights


As PCs decline, Microsoft betting its future on the cloud

Microsoft’s investment in cloud computing is paying off. Its latest financial report shows its Azure cloud-computing business more than doubled in sales from the last quarter.

The company has spent billions of dollars to position itself as the leading alternative to Amazon in selling online computing to Internet startups and big corporations, as well as consumers.

The growth in Microsoft’s cloud business, combined with increased revenue from Windows software licenses and other key segments, helped boost Microsoft’s overall sales to $22.6 billion, after adjusting for deferred revenue, for an overall increase of 2 per cent from a year ago.


Dow inches to record high in mixed day for stock indexes

NEW YORK (AP) — Stocks ended mixed Tuesday as investors let up on the accelerator after a three-week rally sent indexes to all-time highs.

The Dow Jones industrial average inched 25.96 points higher, or 0.1 per cent, for its eighth consecutive gain. But the Standard & Poor’s 500 index pulled back from its record high, losing 3.11, or 0.1 per cent. The Nasdaq composite fell 19.41, or 0.4 per cent.

A mixed set of corporate earnings helped keep the market in a tight range through the day.


US home construction posted solid gain in June

WASHINGTON (AP) — Construction of new homes posted a solid increase in June, led by a surge of building in the Northeast and the West.

The Commerce Department said Tuesday that housing starts rose 4.8 per cent to a seasonally adjusted annual rate of 1.19 million from a revised 1.14 million in May. The June reading was the highest level since February, but was down from 1.21 million a year earlier.

Construction of single-family homes rose 4.4 per cent to 778,000.


IMF says Brexit will drag down world economic growth

WASHINGTON (AP) — Britain’s decision to leave the European Union will reduce global economic growth this year and next, according to the International Monetary Fund.

The IMF said Tuesday that it is shaving its estimate for worldwide growth to 3.1 per cent this year and 3.4 per cent in 2017. Both estimates are 0.1 percentage points lower than the bank’s previous forecast in April.


UnitedHealth’s profit surges, yet Affordable Care Act drags

UnitedHealth’s second-quarter earnings jumped 11 per cent to beat investor expectations even though the nation’s largest health insurer took a bigger hit than expected from coverage linked to the Affordable Care Act.

The company said Tuesday that losses from its ACA-compliant individual business came in $200 million above projections, which means the company now expects to lose around $850 million this year from what amounts to a small slice of its total operation.

But another strong gain from UnitedHealth’s Optum segment helped push the company’s total net income up to $1.75 billion from $1.59 billion in the previous year’s quarter.


Philip Morris Int’l 2Q results miss Street, boosts outlook

NEW YORK (AP) — Philip Morris International Inc.’s second-quarter results missed Wall Street’s expectations as cigarette shipment volume declined. But the seller of Marlboro and other cigarette brands outside the United States also raised its full-year earnings outlook, citing improving currency.

Philip Morris International earned $1.79 billion, or $1.15 per share, for the period ended June 30. That’s down from $1.89 billion, or $1.21 per share, a year earlier. Analysts were expecting $1.21 per share, according to Zacks Investment Research. Revenue fell to $6.65 billion from $6.86 billion, below the $6.8 billion that analysts forecast.


Johnson & Johnson tops 2Q forecasts despite profit drop

Johnson & Johnson easily beat profit forecasts for its second quarter and raised its full-year financial forecasts.

Sales of several key new medicines buoyed revenue, and medical device sales edged up. But sales dipped for consumer products such as Band-Aids and Johnson’s Baby Powder.

The world’s biggest maker of health care products reported net income of $4 billion, or $1.43 per share. Adjusted for one-time items, earnings came to $1.74 per share, 7 cents more than analysts expected. Revenue jumped 3.9 per cent to $18.48 billion, beating market forecasts of $17.89 billion.


Goldman 2Q earnings jump, helped by lower legal expenses

NEW YORK (AP) — Goldman Sachs’ earnings jumped 78 per cent from a year ago as the bank’s legal expenses declined and some of its trading desks saw a surge of activity during Britain’s vote to leave the European Union.

The investment bank said Tuesday it had a second-quarter profit of $1.63 billion after dividends to preferred shareholders, or $3.72 per share, up from $916 million, or $1.98 per share, in the same period a year ago.

The results easily topped analysts’ expectations, with analysts looking for $3.09 per share.


Novartis profit slips as generic drug competition hits sales

GENEVA (AP) — Swiss pharmaceuticals company Novartis says its net profit fell 4 per cent in the second quarter, largely because of new generic competition for its top cancer drug, though it expressed high hopes for a psoriasis drug that has turned out to be one of its best product launches ever.

The Basel-based giant reported Tuesday that net income slipped to $2.93 billion from $3.07 billion a year earlier. Sales slipped 2 per cent to $12.5 billion, though that topped the consensus estimate of analysts for $12.3 billion.


United 2Q profit falls 51 per cent, revenue down too

DALLAS (AP) — Profit at United Airlines was down by half in the second quarter, and the carrier says that the slump in average fares will last through the summer.

United Continental Holdings Inc. said Tuesday that it earned $588 million in the April-June period, down from $1.19 billion a year earlier. Excluding one-time items like write-downs, profit was $2.61 per share, 5 cents better than analysts expected. But revenue fell 5.2 per cent, and the airline forecast that revenue per mile will drop again in the third quarter.


Monsanto rejects Bayer buyout, again

NEW YORK (AP) — Monsanto on Tuesday rejected a second and richer takeover bid from Bayer.

The German drug and chemicals company last week boosted its offer from $62 billion, to about $65 billion, or $125 per share. Monsanto Co., a seed company, called the revised offer inadequate, as it did the initial bid. The St. Louis company said that it remains open to talks with Bayer and others about a deal.

Bayer on Tuesday said that it was disappointed with the second rejection.


The Dow Jones industrial average rose 25.96 points, or 0.1 per cent, to 18,559.01. The Standard & Poor’s 500 index fell 3.11 points, or 0.1 per cent, to 2,163.78. The Nasdaq composite lost 19.41 points, or 0.4 per cent, to 5,036.37.

The price of crude oil fell 59 cents to $44.65 a barrel. Brent crude lost 30 cents, or 0.6 per cent, to $44.66 a barrel in London. Wholesale gasoline fell 1 cent to $1.38 a gallon, heating oil edged up less than 1 cent to $1.38 a gallon and natural gas rose less than 1 cent to $2.73 per 1,000 cubic feet.