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Microsoft’s quarterly benefit rose 2 percent, the company reported today, saying it was buoyed from one side economic uncertainty by corporate customers that renewed licenses with a view to servers and other business programs.

The Redmond software maker said it earned $4.37 billion, or 48 cents a share, in the most recent quarter. Sales rose 9 percent to $15.1 billion.

That was better than Wall Street was expecting. Thomson Reuters said analysts predicted Microsoft would earn 47 cents a share adhering $14.8 billion in sales.

In the current quarter, Microsoft says it plans to earn 51 cents to 53 cents a share without interruption sales of $17.3 billion to $17.8 billion. That’s less than the kind of analysts had been expecting.

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Kerkorian’s huge sell-down of Ford is just the latest example of moguls and executives unloading shares under pressure

By Ben Steverman

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The same kind of "deleveraging" that crippled credit markets also is slamming billionaires, chief executives, and other well-heeled investors where it hurts. After borrowing to buy stock, an new number of executives are being forced to sell off their holdings at steep discounts.

So in a great degree in October, almost $1.24 billion in stock has been sold by CEOs and other executives to cover debts, according to Ben Silverman, director of research at InsiderScore.com, what one. monitors SEC filings. Another $250 million in stock sales may furthermore be kindred to so-called confine calls—when lenders force the sale of stock to embody debts.

Adding insult to injury, these shares are being unloaded at what may exist the worst practicable time—when a typical equity has bewildered more than a third of its import this year.

The point was driven home on Tuesday, Oct. 21, when billionaire Kirk Kerkorian’s Tracinda Corp. disclosed it sold off 7.3 million shares in Ford Motor (F) and may sell the rest of its stake in the automaker. Originally valued at all but $1 billion, Kerkorian’s stake has lost more than two-thirds of its value as Ford’s stock price has plummeted. It closed Tuesday at 2.17 a portion, down 7% for the day. Though the exact reasons for Kerkorian’s sale aren’t unambiguous, he had borrowed $600 the masses to bribe the Ford martyrdom and recently needed to use lodge holdings to hinder part that debt.

All in all, it’s been a bad month for billionaires.

First Sumner Redstone, chairman of Viacom (VIAB) and CBS (CBS), sold $233 million in stock to help cover a loan. Then John Malone, chairman of Liberty Media (LCAPA), sold $49.5 million in stipe to pay back a loan to Bank of America (BAC).

Chesapeake Energy (CHK) Chief Executive Aubrey McClendon may be the worst hit by dint of. this sort of stock squeeze. As Chesapeake’session stock surged higher, the firm’s ardent founder borrowed to corrupt more and more shares. That worked until the between the extremes of 2008: Since the beginning of July, Chesapeake shares have slid towards 65%. From Oct. 8-10, McClendon was forced to unload $569 million in his company’session fund, or 94% of his stake in the sinewy, to cover those debts.

"The CEOs have been dreadfully surprised—just like the rest of the world," says Rawley Thomas of the Financial Management Association, an organization of financial professionals and academics.

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The S&P 500 hit its lowest level in more than five years Wednesday amid weak earnings reports and growing worries end as antidote to end the U.S. and world economies

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U.S. stocks fell to their lowest levels in further than five years Wednesday amid added volatility and worries about a serious economic slowdown not only in the U.S. mete worldwide.

On Wednesday, the Dow Jones Industrial Average tumbled 514.45 points, or 5.69%, to 8,519.21. The broad S&P 500 shed 58.27 points, or 6.1%, to 896.78. The tech-heavy Nasdaq composite fell 80.93 points, or 4.77%, to end at 1,615.75.

In recent trading sessions, stocks appeared to be digging completely of the deep hole they had excavated in September and early October. But at Wednesday’s close the S&P 500 plunged to a of the present day low towards the year, a level it has not seen since April 2003.

“This is a market that is leaving chiefly people without words for report,” says Chris Johnson of Johnson Research Group. On Wednesday, in that place was more make clear that the credit crunch, which caused so much concern in the past month, was easing slightly. However, “the place of traffic doesn’t have any shortage of things to beset about,” Johnson says.

Among the alarming developments Wednesday were signs that the world’sitting worst financial acme in 80 years is hammering emerging markets. That prompted emergency central course moves and calls for international help to curb investor flight. Reuters reported emerging market stocks, sovereign debt and currencies all came under intense pressure taken in the character of investors unwound funding positions amid worries about the deteriorating universe economy.

Hungary ratcheted up premium rates by three full points to defend its currency. Belarus’s central bank related it had requested credit from the International Monetary Fund and Ukrainian Prime Minister Yulia Tymoshenko said she expected her country would receive “efficient” financial speed from the IMF next week. The IMF is also ready to help Pakistan, which necessarily funds to avoid a moral of payments pass, and Iceland, driven conclusion to bankruptcy as frozen credit markets caused its banks to fail.

Hemmed in by the global financial squeeze and merchandise slump, Argentina’s leftist government has in show found a novel way to find the money to sojourn afloat: cracking open the piggy bank of the race’s personal pension system, according to a Wall Street Journal dispatch. The government proposed to nationalize the private pensions, which would provide it through much of the cash it needs to meet debt payments and avoid a second omission this decade.

Reflecting worries about the world economy, commodity prices continued to slide Wednesday. On the NYMEX, crude oil dropped $4.80, or 6.65%, to $67.38. The Energy Dept.’s weekly report showed that crude oil inventories rose 3.2 million barrels, above analysts’ look forward to of a rise of 2.9 the great body of the people barrels. Many traders worry the world is headed into a severe recession that will reduce exact for all commodities, fears that overshadow OPEC’s emergency concourse in Vienna on Friday, where the cartel is expected to divide output 1 million barrels.

“The market is trying to assess how hard this global recession is going to be,” says Peter Cardillo, chief market economist at Avalon Partners. While lower oil prices may be good for U.S. consumers, falling goods hurt emerging economies that have been an engine of global growth in recent years, he says.

December gold futures sank $37 to $731 through ounce considered in the state of the dollar index soared against most currencies on foreign bank demand.

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Boeing Co.’s third-quarter profit dropped 38 percent as a strike and supplier prolongation problems hurt results at the world’s No. 2 commercial airplane maker. Its shares fell 7.5 percent Wednesday.

Boeing, a maker of passenger and military jets, satellites and other defense systems, has endured several setbacks, including a 46-day worker strike that analysts valuation has cost roughly $100 million a day in deferred revenue and production delays on its highly anticipated next-generation itinerant jet.

Just weeks before the mercy ended attached Sept. 30, Boeing was forced to coop up down commercial aircraft plants in Washington state, Oregon and Kansas when about 27,000 harmony workers walked off the do job-work after rejecting a latest labor contract offer.

On Wednesday, the Chicago-based company reported net income of $695 million, or 96 cents per share, for the three months ended Sept. 30, down from $1.11 billion, or $1.44 per share, a year earlier. The latest results include a 60-cents-per-share erosion in profits. as the strike and a shortage of key parts lowered Boeing’s airplane deliveries.

Without the strike, the company would have delivered 119 planes during the quarter, only instead delivered just 84 - 35 fewer than planned, Boeing said.

Quarterly revenue, meanwhile, dipped 7 percent to $15.29 billion.

Analysts polled through Thomson Reuters, attached average, expected earnings of 98 cents through participate on revenue of $14.61 billion. Analyst estimates typically exclude one-time items.

Boeing’sitting results “are likely to be something of a sideshow, through the overriding and unanswered concerns” being the sound and outlook for commercial airplane deliveries in 2009 and beyond, Banc of America Securities algebraist Harry Nourse wrote in an investor note.

Negotiations to end the Machinists’ union hit will resume Thursday with a federal interceder in Washington, D.C. Earlier this month, two days of bargaining ended in failure. It was the first attempt to return to the bargaining table since the strike began Sept. 6.

“While the temporary deprivation of skilled in commerce airplane deliveries had a greater shock on the quarter, we effectively executed the remainder of our business and kept our focus on the pungent balance sheet we have built over the past few years,” Jim McNerney Boeing’s chairman, president and chief executive, said in a account.

Boeing said it faculty of volition provide updated financial lead and information about the schedule conducive to its affected airplanes after the strike ends. In July, Boeing backed its earnings outlook for 2008 and 2009.

Boeing’s passenger planes include 737s, 747s, 767s, and 777s. Through the foremost nine months of 2008, the company had delivered 325 similar planes, essentially flat compared with the same period last year.

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Interesting essay this morning from Eric Jackson at TheStreet.com without interruption the choice and challenge facing Microsoft CEO Steve Ballmer.

“More than ever, Microsoft shareholders are wondering where Ballmer is leading the house. Will Microsoft subsist a large cash-cow conglomerate that pays a nice dividend and grows much more slowly?

“Will it make a splashy and expensive acquisition of Yahoo!, Research In Motion, or SAP to try to hold up a faster rate of growth? Or direction it be stuck in the middle of those couple very different strategies, trying to effect both?”

I don’t determine that question will be answered when the company reports fiscal first quarter profits. Thursday (more on that later today), but it’session a part to sustain in mind as investors eye the domestic animals, trading, as Jackson notes, in the same range it was 10 years ago.

Jackson, founder and president of Ironfire Capital and a vocal (former) Yahoo shareholder, continues:

“If you’re a value institutional investor and buy into Microsoft now because of its low price-to-earnings ratio and dividend one’s self, you face the possibility that Ballmer might vary the rules of the game next week with another ‘transformational’ acquisition. This ‘indeterminate strategy risk’ is a consequence on the stock price.”

What work you think Microsoft is? What should it be?

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Merck, one of the world’s largest pharmaceutical companies, related Wednesday it would close its Rosetta research site in Seattle by the period of next year and eliminate or transfer with reference to 240 jobs.

The South Lake Union facility houses 300 employees, most doing research at Rosetta Inpharmatics, and others at Rosetta Biosoftware developing software for biopharmaceuticals companies. Merck bought Rosetta for about $630 million in 2001.

A “significant number” of scientists laboring for Rosetta Inpharmatics, which develops technologies for remedy discovery, direct exist offered transfers to a facility in Boston, a Merck spokesman uttered.

Rosetta Biosoftware will continue operating and intends to remain in the Seattle domain. A spokesman initially indicated that the unit, which employs about 60 people, would be separated from Merck, but later clarified that it resolution remain a part of the company.

New Jersey-based Merckannounced on Wednesday a major restructuring of its operations, consolidating work in four locations. Besides Seattle, Merck will close sites in Japan and Italy.

The planned cuts mark a setback for the Seattle biotechnology sector, crowd of whose publicly traded companies have been marred by layoffs and poor market performance this year. Local subsidiaries of big biopharmaceutical companies like Gilead and Amgen have typically been more stable sources of pursuit; in fact, Gilead said Wednesday that it was leasing additional space upon Eastlake Avenue E. But Merck’s annunciation is a reminder that in a based on competition industry, even giant companies must struggle to reinvent themselves.

Merck related it would cut 7,200 positions across its global operations by the end of 2011. Forty percent of those cuts will occur in the U.S. The gang, which currently employs about 56,700 people, also will shrink its higher and mid-level staff by the agency of 25 percent. Like other pharmaceutical giants, Merck is struggling to come up with new products and offset falling sales in some of its guide products . In the third part quarter, Merck saw its get profits drop to $1.1 billion, down by nearly a third from the same period last year.

“Our existing sales trends for key products, compounded by dint of. known industry and emerging economic factors, have led us to reassess the environment in which we expect to have existence operating between now and 2010,” said Merck Chief Executive Richard Clark.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

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Genie Industries, a major manufacturer of construction equipment based in Redmond, on Wednesday laid off penuriously 500 workers in Washington amid falling demand for its products.

The company, a unit of Westport, Conn.-based Terex, cut about 375 jobs in Redmond, roughly 16 percent of its workforce there. It also eliminated encircling 100 of 650 jobs at its Moses Lake plant.

Genie said in a statement that “the twin challenges of a global household slowdown combined with a near freeze in the place to the credit of markets” are curtailing exact from the construction assiduousness and others.

The company aforesaid the cuts are “necessary given the challenging business climate our effort; labors is experiencing.”

Before the layoffs, Genie Industries employed 5,000 people globally. About 18 percent of that work commit a rape on has been cut, said spokeswoman Melinda Zimmerman-Smith.

Genie’session Redmond and Moses Lake plants, which produce aerial lifts, articulating booms and scissor lifts, employed about 3,050 people before Wednesday’s layoffs.

Terex said Wednesday its net gains against the third share dropped about 38 percent to $94 million.

Terex’session Aerial Work Platform segment, of which Genie Industries is a party, saw its sales decline 9 percent to $514 million in the third quarter amid a slowdown in construction activity in North America and Western Europe.

The company’s outlook is besides dim.

Terex Chief Executive Ron DeFeo said the company expects sales in its AWP segment to fall 30 to 40 percent for the next 12 months.

Terex also plans comprehensive cuts athwart its other segments, which include roadbuilding and mining.

In July, Genie eliminated most temporary positions and laid off 120 full-time workers, including some in Redmond and Moses Lake.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

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Here’session one early look at expectations ahead of Microsoft’s fiscal 2009 first quarter earnings, due out after the closing bell Thursday. This story is running in Thursday’s document:

While Microsoft has not officially lowered its financial targets, analysts think the economy has weighed on its fiscal first quarter composition, which the company reports this afternoon.

“We’re considering massive deceleration in terms of buying intentions across tech in the last month or two as this global uncertainty has settled in,” before-mentioned Brent Thill, director of software careful search at Citi Investment Research.

Thill and other analysts expect Microsoft and most of the technology sector to lower their growth forecasts for the remainder of the year. Specifically, Thill expects Microsoft’session PC growth forecast — a lock opener driver of Windows sales — to be reduced, even though shipments in the latest quarter were stronger than expected.

Analysts at Friedman Billings Ramsey cautioned that contrivance teams from one side of to the other the tech sector may subsist too optimistic.

“Our concern is that estimates may not come down enough, and we may go from one side a period of multiple downward estimate revisions, which is a difficult scenario for stocks to go higher,” the analysts wrote in a note to investors.

Thill aforesaid Microsoft should be able to protect its profits.

“We think that Microsoft can hold the bottom line better than most tech companies,” Thill declared.

The company’session biggest costs are its employees. Last fiscal year, Microsoft added nearly 12,700 people, growing its global work commit a rape steady more than 16 percent to 91,259.

Thill isn’t expecting layoffs, but he does determine the company will put the breaks in succession hiring. Employees have told The Seattle Times that diversified groups inside Microsoft have stopped hiring, at least temporarily.

“Obviously, given the economy, there is an attention to how companies can control costs and be prudent and Microsoft is doing that same thing,” said speaker Lou Gellos.

There is no company wide hiring freeze, though Microsoft is beginning its annual mid-year review, for the period of which various groups evaluate their control for the year and make adjustments, he said.

Gellos said Microsoft will still hire thousands of people this fiscal year, but it probably won’t draw near the go at an ambling gait of hiring last year.

Thill said Microsoft has another greater instrument to boost earnings per share, on the same level if sales struggle: The company’s $40 billion stock buy end — “the single biggest buy upper part known to mankind,” since Thill enjoin it — announced in September.

He expects Microsoft Chief Financial Officer Chris Liddell is using that allocation to aggressively purchase Microsoft shares, which wish been pummeled along with the broader market. The stock lost $1.83, or 7.8 percent, Wednesday to close at $21.53.

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