Major area employer: Wachovia

Wachovia Corp. reported a surprisingly large second-quarter loss yesterday, deflating Wall Street's hopes that the nation's big banks are weathering the credit crisis well.

The bank said it lost $8.86 billion, is slashing its dividend and is eliminating 10,750 positions after losses tied to mortgages soared.

Even excluding one-time items, which normally are not included in outsiders' predictions, the results substantially missed analysts' estimates.

After Wachovia's new CEO said he plans to cut $2 billion of expenses by the end of next year and sell parts of the fourth-biggest U.S. bank, shares rose $3.61, or 27.4 percent, to $16.79.

Three rating agencies downgraded their ratings on Wachovia's debt, citing increased expectations of losses in the bank's mortgage portfolio and its reduced flexibility to raise capital.

Wachovia said it lost the equivalent of $4.20 per share in the April-June period. In the same time last year, the bank earned $2.34 billion, or $1.22 per share.

Earlier this month, the Charlotte-based bank had projected a $2.6 billion to $2.8 billion quarterly loss, equal to $1.23 to $1.33 per share, excluding goodwill items.

Wachovia's problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments.

-- The Associated Press

SunTrust Banks

SunTrust Banks Inc. said earnings dropped 21 percent as more real estate loans went sour. The stock gained 16 percent after SunTrust said it won't need to sell shares or cut the dividend.

Second-quarter net income available to common shareholders fell to $535.3 million, or $1.53 a share, from $673.9 million, or $1.89, in the year-earlier period, SunTrust said yesterday. Earnings at the Atlanta-based bank, excluding gains from selling stock in Coca-Cola Co., were 78 cents a share, exceeding the average analyst estimate of 66 cents.

The company has the least cash set aside for possible loan losses among large U.S. banks, JPMorgan Chase & Co. analyst Vivek Juneja wrote in a June 20 report.

The bank's stock added $5.52 to $39.66 in New York Stock Exchange composite trading.

-- Bloomberg News

Dow industrial firms: DuPont

Chemicals maker DuPont said yesterday that strong agriculture sales and emerging international markets helped fuel a rise in second-quarter profit by helping to offset domestic housing and auto markets.

Wilmington, Del.-based DuPont earned $1.08 billion, or $1.18 per share, during the quarter that ended June 30, compared with profit of $972 million, or $1.04 per share, during the previous year's quarter. A lawsuit settlement and a lower tax rate from a one-time tax settlement accounted for 7 cents of the per-share earnings.

Excluding one-time items, the company posted an adjusted per-share profit of $1.11, topping Wall Streets' average view by 4 cents per share.

Revenue rose 12 percent to $8.83 billion.

Shares of DuPont, a major local employer, rose $1.16, or 2.6 percent, to $45.21 Tuesday.

-- The Associated Press

United Parcel Service

UPS Inc., the world's largest shipping carrier, said yesterday that its profit fell nearly 21 percent in the second quarter despite a more than 6 percent increase in sales. The company also lowered its 2008 outlook.

Executives at the major local employer said they were taking several initiatives to control costs, including freezing hiring in non-sales jobs.

UPS shares rose $2.65, or 4.5 percent, to close at $62.11.

UPS, hit by an average daily volume decline in the U.S. and soaring fuel costs, said its profit was $873 million, or 85 cents a share, in the second quarter, compared with a profit of $1.10 billion, or $1.04 a share, for the same period a year ago. Revenue grew to $13 billion from $12.2 billion.

-- The Associated Press

Caterpillar

Caterpillar Inc.'s second-quarter profit jumped 34 percent as stronger international sales outpaced higher raw material and freight costs for the maker of backhoes and other heavy equipment.

The Peoria, Ill.-based company yesterday reported profit of $1.11 billion, or $1.74 per share, for the three months that ended June 30, compared with $823 million, or $1.24 per share, a year earlier.

The results beat Wall Street expectations of $1.54 per share on revenue of $12.69 billion.

Quarterly revenue rose 20 percent to $13.62 billion. Caterpillar generated 60 percent of quarterly sales and revenues outside North America, up from 55 percent a year earlier.

Shares rose $1.75, or 2.4 percent, to close at $74.98.

-- The Associated Press

Virginia company: Norfolk Southern

Norfolk-based Norfolk Southern Corp. said yesterday that its second-quarter profit rose 15 percent as higher revenue per shipment offset a 2 percent decline in traffic.

The rail operator said it earned $453 million, or $1.18 per share, in the quarter that ended June 30, up from $394 million, or 98 cents per share, during the same period last year. Revenue rose 16 percent to $2.77 billion.

Analysts surveyed by Thomson Financial expected profit of $1.05 per share on revenue of $2.65 billion.

Weakness in the automotive and housing industries contributed to the traffic decline. But other categories boomed.

Norfolk Southern shares rose $2.15, or 3.4 percent, to close at $65.69 before the results were released. In after-hours trading, they rose $1.01 more to $66.70.

-- The Associated Press

Richmond-based company: Dynex Capital

Dynex Capital Inc., a specialty finance company based in Glen Allen, said it had net income available to common shareholders of $3.19 million, or 26 cents per share, for the quarter that ended June 30. That compares with a profit of $1.70 million, or 14 cents per share, in the year-ago period.

Chairman and CEO Thomas Akin said he was pleased Dynex increased its book value per common share from $8.07 at the end of the first quarter to $8.24 at the end of June. He said he expects a similar increase this quarter as Dynex is released from certain mortgage servicing obligations.

The company elects to be treated as a real estate investment trust for tax purposes.

Shares rose 12 cents to $7.77.

-- Marilyn J. Shaw

Community bank: First Capital Bancorp

The holding company for Glen Allen-based First Capital Bank said second-quarter earnings rose 6.7 percent to $386,000, or 13 cents per share.

That compares with $362,000, or 18 cents per share, for the same three months of 2007.

The decline in per-share earnings followed a stock offering last year of slightly more than 1 million shares.

Total assets at were $396.5 million, up $109.5 million, or 38.1 percent, from the same period in 2007.

The company, which operates seven branches in the Richmond area, says it has no subprime mortgage exposure.

Shares were unchanged yesterday at $9.50.

-- Marilyn J. Shaw