Google earnings come up short, stock drops 6 percent

February 15th, 2008

(07-19) 14:14 PDT — Google Inc. showed strong growth in the second quarter, but its earnings failed to meet Wall Street’s expectations, sending the company’s shares down more than 6 percent in after-hours trading.

The disappointing results are a sharp departure for Google, the Mountain View technology titan. Usually, the company handily beats analyst expectations, but rapid hiring and the cost of its data centers cut into its results.

Second-quarter profit jumped 28 percent to $925.1 million ($2.98 per share), from $2.39 million ($2.33) a year ago.

Excluding the cost of stock options and other expenses, Google would have earned $3.56 per share, missing the average analyst estimate of $3.59 per share among analysts polled by Thomson Financial.

Google’s second-quarter revenue increased 58 percent to $3.87 billion, up from $2.46 billion for the equivalent period in 2006.

Google’s shares fell $34.17 to $514.42, or 6.2 percent, in after-hours trading.

E-mail Verne Kopytoff at vkopytoff@sfchronicle.com

Toys “R” Us Toughening Safety Standards

February 15th, 2008

(02-15) 07:58 PST Wayne, N.J. (AP) —

Toys “R” Us will soon have stricter safety standards for the products it sells in its more than 1,500 stores.

Starting March 1, the Wayne-based toy retailer is setting a much tighter standard for the amount of lead allowed in toys made just for the chain.

It’s also barring two chemicals that have raised safety concerns in products for infants and young children.

By the end of the year, there also won’t be nickel-cadmium batteries in Toys “R” Us products Д a move meant to help the environment.

The company says the changes should meet or exceed new federal standards expected from Congress.

European air safety regulator to consider grounding Bombardier turboprops

February 15th, 2008

PARIS: Europes air safety regulator expressed deep concern Monday following another crash landing of a Scandinavian Airlines turboprop plane in less than two months - the third such accident in less than two months involving the same type aircraft.

“We are very concerned about this most recent Dash-8 Q400 accident and the possible relation with other accidents involving the same plane,” Daniel Hцltgen, a spokesman for the European Aviation Safety Agency, said, referring to the twin-engined commuter plane made by Bombardier of Canada.

He said the Cologne-based regulator had requested an emergency meeting with the planes manufacturer, Bombardier Aerospace, and Canadian transportation safety officials, to discuss the possibility of ordering a renewed grounding of the planes.

The board of Scandinavian Airlines announced Sunday that the carrier would permanently discontinue use of its 27-jet fleet of Q400 planes after a flight from Bergen, Norway, with 44 people on board crash-landed in Copenhagen on Saturday after its main landing gear failed to extend. No one was seriously injured in the incident, which followed two instances in September where the airlines Q400s skidded off runways in Denmark and Lithuania due to a landing gear failure.

The European safety agency said it had offered its assistance to the Danish authorities investigating the latest Q400 accident.

“What is important is for us to get the details fast,” Hцltgen said.

Separate investigations last month by the Danish and Lithuanian authorities concluded that the two earlier accidents had been the result of corrosion of a specific landing gear component.

Maintenance documentation supplied by Bombardier to all Q400 customers recommends that airlines inspect the planes main landing gear and its retraction mechanism every 400 flight hours. Operators are also advised to replace certain components of the retraction mechanism after every 22,400 flights.

Hans Ollongren, a spokesman for Scandinavian Airlines, said that Saturdays incident did not immediately appear to be related to the previous two.

“In the first two cases, the reason for the collapse was the corrosion in a component that was not subject to inspection according to the manufacturers maintenance manual,” Ollongren said. “In Copenhagen, it was the case that the main landing gear did not extend properly.”

A spokesman for the Danish Accident Investigation Board did not immediately return calls seeking comment about the latest accident. Denmarks transport minister, Jakob Axel Nielsen, described the incident on Saturday as “shameful and frustrating.” We need to get all the way to the bottom of this case,” he said.

Bombardier has said it is “disappointed” that Scandinavian Airlines has chosen to discontinue operating the Q400 before the Danish authorities had concluded their inquiry. The plane maker said that after consulting with Transport Canada, which certifies Bombardier planes for safety, it had sent a notice to all Q400 operators advising them to continue normal operations of the plane.

Lucy Vignola, a Transport Canada spokeswoman, said Monday that the regulator was awaiting further information from the Danish investigation before issuing any advisory to operators of the plane. She said a team of Canadian air safety officials had arrived in Copenhagen on Sunday to observe the investigation.

Scandinavian Airlines - the joint flag carrier of Sweden, Denmark and Norway - said it had been forced to cancel around 150 flights since Sunday. Ollongren said the carrier planned to replace the affected Q400 planes with others from its 300-plane fleet as well as leased aircraft.

The airline estimated that the decision to stop flying its Q400s could cost it as much as 400 million Swedish kronor, or $63 million, through the end of 2007.

Twenty-six airlines operate the 78-seat commuter jet, which entered commercial service in 2000. The Scandinavian Airlines Q400 fleet is the second-largest in Europe after the British low-cost carrier Flybe, which operates 29. A spokeswoman for Flybe could not be reached for comment about the carriers plans for its Q400 fleet.

The worlds largest fleet of Q400s is operated by the U.S. regional carrier, Horizon Air, which has 33 of the planes. Horizon, which is based in Seattle, plans to continue flying its turboprop fleet, Bill Conniff, an airline spokesman, told Bloomberg News. The company has an order for 15 more aircraft to be delivered starting in October 2008 and has no plans to cancel that order, Conniff said.

Ian Austen contributed reporting from Ottawa.