Business highlights

SAN FRANCISCO — Safeway Inc.’s second-quarter profit slipped 11 percent because of an unusual twist on its income taxes, but the second largest U.S. grocer remained on a sales upswing that has been propelled by a makeover of its stores.

The results released Thursday were overshadowed by concerns that rising food and dairy prices might squeeze Safeway’s profit margins for the rest of the year. Those worries contributed to decrease of more than 2 percent in Safeway’s stock price.

The Pleasanton-based company earned $218.2 million, or 49 cents per share, during the three months ended June 16. That compared with net income of $246.2 million, or 55 cents per share, at the same time last year.

Hard drive maker Seagate 4Q earnings rise from tax benefit

SAN JOSE — Seagate Technology LLC, the world’s leading provider of hard drives used in computers and other electronics, said Thursday its fiscal fourth-quarter profit rose sharply, helped by a tax gain and strong sales despite a tough pricing environment.

Seagate posted earnings of $541 million, or 96 cents per share for the quarter ended June 29. The net income included a $359 million favorable tax adjustment, the company said. In the year-ago quarter, Seagate earned $7 million, or 1 cent per share.

Revenue grew 8.5 percent to $2.74 billion the year-ago period.

Analysts, on average, expected a profit of 36 cents per share on sales of $2.69 billion, according to a survey by Thomson Financial.

For the full fiscal year, Seagate said it earned $913 million, or $1.56 per share, beating its lowered earnings target stated in April of 92 cents to 96 cents per share. Sales were $11.4 billion, in line with expectations, up 23 percent from $9.2 billion the previous year.

Shares of the Cayman Islands-based company, which operates out of Scotts Valley, closed at $24.12, up 71 cents, or 3 percent.

Newspaper publishers see big declines in advertising

Newspaper publishers reported sharply lower advertising revenues for the second quarter on Thursday, and two of them laid part of the blame on a drop-off in real estate advertising in key markets.

McClatchy Co. and Media General Inc. both reported steep advertising declines and lower profits, while Dow Jones & Co., publisher of The Wall Street Journal and the target of an acquisition bid by Rupert Murdoch’s News Corp., had lower profit because of a charge but higher revenue and operating income.

McClatchy, which owns The Miami Herald and several newspapers in California, including The Sacramento Bee and The Fresno Bee, had a 9.8 percent decline in advertising revenue across its 31 newspapers, with the biggest drops coming in Florida and California. McClatchy is the country’s third-largest newspaper company, behind Gannett Co. and Tribune Co.

McClatchy attributed much of the weakness in those markets to economic factors including the slowdown in the formerly hot housing sector.

With real estate playing a key part of the local economies, other ad categories such as autos and employment also sagged, McClatchy Chief Executive Gary Pruitt said.