Insurance, Retail Buoy Sears Profit : Earnings: Microsoft, BankAmerica also report increases, but Pacific Telesis shows a decline.

Sears, Roebuck & Co. on Wednesday reported that its second-quarter profit rose on the continuing strength of its revitalized merchandise group and the performance of the Allstate insurance business.

The company earned $503.4 million, or $1.27 a share, on revenue of $13.01 billion, in the quarter ended June 30, compared to $1.01 billion, or $2.86 per share, on revenue of $12.16 billion in the second quarter of last year.

But the 1993 figure included a gain of $635.1 million from a public offering of 20% of Allstate stock. When onetime items are excluded, 1993 second-quarter earnings were $458.5 million, or $1.19 per share, giving Sears a nearly 10% profit gain in the second quarter of this year.

Edward Brennan, Sears chairman and chief executive, said the results were also boosted by a reduction in debt and interest expenses, to $8.1 million from $58.4 million in 1993.

The company has also had strong apparel sales, taking business away from discounters and some specialty store chains. Its “Softer Side of Sears” ad campaign has been a success.

Allstate reported second-quarter income of $379.5 million on revenue of $5.32 billion, up from income of $351 million on revenue of $5.23 billion during the same 1993 period.

Allstate Chairman Wayne Hedien said strong results by both the property-liability and life insurance businesses helped offset large payouts for damages from the Northridge earthquake and severe winter weather.

Microsoft Corp., the world’s largest computer software company, said its fiscal fourth-quarter earnings rose sharply, boosted by strong sales of its operating system software.

The company said net income rose by about a third to $362 million, or 59 cents a share, in the quarter ended June 30, from $265 million, or 43 cents a share, a year ago.

Revenue rose 24% to $1.29 billion from $1.04 billion, the Redmond, Wash.-based company said.

Mike Brown, Microsoft’s vice president of finance, said sales of the company’s Windows operating software for personal computers contributed significantly to the results.

Brown also credited strong sales of Microsoft Office, a suite of applications that includes word-processing, spreadsheet and other products.

For the full fiscal year, Microsoft said its profit rose 20% to a record $1.15 billion, or $1.88 a share, from $953 million, or $1.57 a share, the prior year. Prior-year results were restated to reflect a 2-for-1 stock split in May of this year.

Microsoft said full-year revenue rose 24% to a record $4.65 billion from $3.75 billion the prior year.

Following the industry trend of higher profits fueled by new loan growth, BankAmerica Corp. said its earnings grew 8% during the second quarter compared to the same period last year.

The nation’s second-largest banking company said brisk loan business helped push profit up to $525 million, or $1.33 a share, during the three-month period ended June 30, compared to $488 million, or $1.20 a share, a year ago.

Like the country’s other top banks, San Francisco-based BankAmerica saw consumers take out more loans in the second quarter and saw business customers who had defaulted on loans begin to pay off debts.

Pacific Telesis Group, the regional Bell company in California and Nevada, reported a drop in second-quarter profit due to a special rate order by regulators.

The San Francisco-based phone company earned $278 million, or 65 cents per share, in the quarter ended June 30. A year ago, it earned $283 million, or 69 cents per share.

The company’s performance in the latest quarter was reduced by a onetime $29 million charge from an order by California regulators regarding Pacific Bell’s payment-processing system. The problem was discovered and corrected in 1991.

Without the onetime charge, PacTel said net income would have been $307 million, or 72 cents per share.

Revenue was $2.25 billion, down slightly from $2.3 billion a year ago. The decline in revenue was offset by a $59 million decrease in operating expenses.

The results exclude PacTel’s cellular phone business, which was spun off as an independent company in April.

MCI Communications Corp. said its second-quarter profit rose 44%, excluding special charges, as its traffic continued to grow at the fastest rate in the long-distance industry.

The nation’s second-largest long-distance company earned $215 million, or 37 cents a share, in the quarter ended June 30. A year earlier, it earned $150 million, or 32 cents a share, in the same period.

MCI had a $28-million charge, or 5 cents per share, in the second quarter of 1993 for debt retirement.

Revenue was $3.3 billion, up 13% from $2.9 billion a year earlier.

MCI said its traffic was up 14% over the year-ago quarter. On Tuesday, rival Sprint Corp. said its traffic was up 12%.

MCI said it experienced solid growth in all business segments.

The parent companies of American Airlines and USAir reported sharply improved quarterly profits as cost cutting and a growing economy lifted the fortunes of major airlines.

AMR Corp. earnings more than tripled and USAir Group Inc. doubled its profit from a year ago. The results are in line with expectations for a profitable spring and summer for the industry. AMR earned $153 million, or $1.77 per share, in the three months ended June 30, compared to earnings of $47 million, or 39 cents per share, in the same period a year earlier. Revenue fell to $4.1 billion from $4.2 billion.

Results included a onetime gain of $22 million from a change in how the company estimates projected frequent-flier mileage awards.

The results “confirm that when we achieve our cost objectives, AMR will be a much more successful company--and that is good news indeed,” Chairman Robert Crandall said in a news release.

USAir earned $13.81 million on revenue of $1.88 billion in the three months ended June 30. After the company paid dividends to preferred stock holders, the earnings worked out to a loss of 9 cents per share. A year ago, the company earned $5.83 million but lost 23 cents per share after payment of preferred stock dividends, on revenue of $1.82 billion.

Compaq Computer Corp., continuing to grow at a pace-setting rate for the personal computer industry, reported that its second-quarter profit more than doubled from a year ago.

Compaq earned $210 million, or 78 cents per share, in the quarter ended June 30. It earned $102 million, or 40 cents a share, in the same period a year ago.

The per-share results reflect a 3-for-1 stock split effective May 31.

Sales reached a record $2.5 billion, a 53% increase from $1.6 billion a year ago.

“The growing worldwide acceptance of the Compaq brand has helped propel the company to another record sales quarter,” said Eckhard Pfeiffer, the Houston-based firm’s president and chief executive.

Los Angeles-based Occidental Petroleum Corp. reported a $19-million second-quarter loss, saying it slipped on lower crude oil prices and higher international exploration costs.

The loss of 12 cents per share contrasts with a profit of $75 million, or 21 cents per share, in the 1993 second quarter. Quarterly sales rose from $2 billion in 1993 to $2.2 billion this year.

Oil and gas operating earnings fell sharply, from $130 million in the second quarter of 1993 to $25 million. Noting that oil prices improved in the middle of the quarter, Occidental said recent price hikes in several of its chemical businesses should increase profit in coming quarters.