Earnings: Microsoft, Honeywell, Bank of McKenney

Dow industrial firm: Microsoft

Consumers may be shopping for computers again, but Microsoft Corp. still needs businesses to do the same.

Microsoft said yesterday that its revenue kept falling, and its net income dropped 18 percent in the third quarter, partly because of the hesitation of businesses. They are more profitable for Microsoft than consumers are.

But big cost cuts at Microsoft made a difference, helping the company deliver earnings well above analysts' expectations.

Microsoft's earnings in the quarter dropped to $3.6 billion, or 40 cents per share, though that was much higher than the estimate of 32 cents in a Thomson Reuters survey. In the same period last year, Microsoft earned $4.4 billion, or 48 cents.

Big local employer: Honeywell

Honeywell International Inc. said yesterday that third-quarter profit fell 15 percent as sales dropped in all divisions, with key markets in aviation and industrial products continuing to struggle.

More than half of the company's sales are overseas. As a result of its exposure, Honeywell has been hit hard by some of the economy's weakest sectors, such as the aerospace, automotive and construction markets, which have been in a prolonged slump.

The company earned $608 million, or 80 cents per share, in the quarter ended Sept. 30, down from $719 million, or 97 cents, a year ago.

Its profit was helped by 4 cents per share for a lower-than-expected tax expense.

Revenue fell 17 percent to $7.7 billion from $9.28 billion a year ago.

Analysts surveyed by Thomson Reuters expected lower earnings of 72 cents per share on higher revenue of $7.88 billion. -- The Associated Press

Community bank: Bank of McKenney

The Bank of McKenney reported a third-quarter loss of $482,000, or 25 cents per share, compared with earnings of $305,000, or 16 cents, in the same period a year ago.

The loss was primarily due to a $1.2 million charge to bolster the reserve for loan losses.

Total assets were $179.2 million, up from $165.5 million at year's end.

"The local economy has been spared the most devastating effects of the severe economic downturn of the last two years," said Richard M. Liles, president and CEO. "However, certain credit relationships had become distressed during the third quarter."

The quarterly loss is the first one in more than 20 years, Liles said, but the bank remains profitable for the year.

The Dinwiddie County-based bank has six branches.

Shares closed at $5.25, down 24 cents. -- Carol Hazard