Compiled by Julie Leupold
TOP STORIES
Newport Beach-based savings and loan operator Downey Financial Corp. reported a big second-quarter loss, hired an investment bank to consider its options and saw longtime chairman Maurice L. McAlister step aside. The company reported a $218.9 million loss, versus a profit of $32.7 million a year earlier. Analysts were expecting a $128 million loss. Downey’s provision for bad loans rose to $258.9 million, up from $9.5 million a year earlier. Non-performing assets, or loans where borrowers aren’t making payments, rose to 15.5% of Downey’s assets of $12.6 billion, up from 8% at the start of 2008 and 1.5% a year earlier. It was a double whammy for Downey as bad loans rose and assets shrunk 15% from a year earlier. The thrift hired Sandler O’Neill Partners LP to explore options, including a possible sale. McAlister, who cofounded the company and owns 20% of its stock, has held sway over Downey for decades.
Aliso Viejo’s Datallegro Inc. is being bought by Microsoft Corp. Terms of the deal, set to close next month, weren’t disclosed. Microsoft said it will keep most of DataAllegro’s employees and its local headquarters, which has some 100 people.
TECHNOLOGY
Lake Forest-based disk drive maker Western Digital Corp. reported results for the June quarter that beat expectations, but a cautious outlook and an analyst downgrade sent its stock sliding on Friday. Western Digital reported $2 billion in revenue, up 43% from the same period a year earlier and ahead of analysts’ expected $1.9 billion. Without charges, the company saw $198 million in profits, beating analysts’ expectation of $182 million. The company warned tough “conditions created in the June quarter” will continue. A Needham & Co. analyst downgraded the stock from “strong buy” to “buy.”
Santa Ana’s Ingram Micro Inc. gave a cautious outlook for the quarter. Excluding an estimated $7 million in charges, the company is looking for third-quarter profits in line with Wall Street expectations of about $67 million. But Chief Executive Greg Spierkel cautioned about modest sales growth. Ingram Micro expects sales of $8.5 billion to $8.8 billion. The tempered outlook comes on the heels of Ingram’s second-quarter results, which were in line with expectations.
QLogic Corp. reported quarterly results that beat Wall Street’s expectations. QLogic posted June-quarter sales of $168 million, up 20% from a year earlier and beating analysts’ expected $162 million. Without charges, QLogic saw $42 million in profits, beating expectations of $39 million.
Irvine chipmaker Broadcom Corp. quadrupled profits in the second quarter from a year earlier and saw revenue that beat expectations. Profits including charges for the quarter were $135 million, up from $34 million a year earlier. The company reported sales of $1.2 billion, up 34% from the same period a year earlier and a bit above analysts’ expectations of $1.1 billion.
HEATHCARE
Santa Ana-based hospital operator Integrated Healthcare Holdings Inc. is raising about $11 million in a stock sale with the proceeds set to go to pay down debt. Kali P. Chaudhuri, who already owns about 40% of Integrated, is buying or converting 87 million shares from Integrated.
Beckman Coulter Inc. posted a higher-than-expected second-quarter profit of $90.7 million before charges. Second-quarter revenue grew 16% to $798.3 million. Stronger results from its clinical diagnostics business and overseas sales drove the gains. Analysts expected Beckman to make $54.7 million on revenue of $756 million.
Edwards Lifesciences Corp. said second-quarter profit rose 14%, beating Wall Street expectations. Edwards posted a profit of $39.7 million in the second quarter, compared with $34.9 million in 2007’s second quarter. Without an $800,000 gain, Edwards earned $39 million in the quarter. Analysts expected Edwards to make $35.1 million. Heart valve sales rose 23% to $162.6 million. The company also raised its 2008 outlook.
REAL ESTATE
Orange County office construction fell 91% in the second quarter to 325,276 square feet, compared with 3.5 million square feet a year earlier, according to Voit Commercial Brokerage LP. The drop was due to market conditions and the end of a building cycle where 7 million square feet of office space has been built in the past five years, Voit said.
APPAREL
Costa Mesa-based Volcom Inc. acquired Laguna Surf & Sport, which sells Volcom clothes at its Laguna Beach and Aliso Viejo stores. Terms of the deal weren’t disclosed. Separately, the company beat expectations with second-quarter results but cut its outlook for the current quarter.
