The Daily Dow
Wednesday, October 22, 1997
by Robert Sheard

LEXINGTON, KY. (Oct. 22, 1997) -- The earnings parade continues today. Among a spate of Dow components announcing results, the two that concern the Foolish Four directly came from CHEVRON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHV)") else Response.Write("(NYSE: CHV)") end if %> and MINNESOTA MINING & MANUFACTURING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMM)") else Response.Write("(NYSE: MMM)") end if %>.

First the so-so news. Chevron's earnings rose from $655 million last year to $727 million this year, or $1.11 per share, despite the fact that revenue declined almost $1 billion. Earnings from United States downstream operations were particularly good, rising 82% as a result of a favorable market and lower operating costs. But upstream operations slipped 12% as a result of declining oil prices. Chevron's chemical division saw earnings slip 44% because of lower prices and rising operating expenses, the result of maintenance and expansion projects. Even though the $1.11 EPS surpassed the Street's expectations, Chevron's stock slipped roughly one percent today.

The exciting news, though, comes from your favorite Post-It Note maker, 3M. In dumping its outdoor-advertising business, 3M boosted its earnings nearly 58% for the third quarter of 1997. The company posted earnings of $2.25 a share. Pulling out the gain from the sale, the $1.05 earnings from continuing operations came in a penny ahead of Wall Street expectations. Wall Street was cheered doubly because of volume growth of better than 10% and continuing productivity gains. Given that a weak currency translation cost 3M's earnings seven cents a share, the quarterly result looked even better and the stock jumped five percent on the news.

If you're following along with our model portfolio at home, it's taken nine and a half months for the Foolish Four to get in front of the overall Dow, but it's finally made it there. This isn't unusual however. These stocks, after all, are "Dogs," and it can take several months for a Dow High Yielder's price to bottom out and start its much-anticipated rise. When a long-suffering Dow stock begins rising, though, the rally can last for many months and boost the Foolish Four portfolio far ahead of the Dow 30. This quarter, the earnings news for all four of our Foolish Four components was promising, and the portfolio returns have risen faster than the overall index as a result. Two and a half months to go, of course, but 1997, after what was a seemingly dreadful start versus the market, may prove to be yet another market-beating year for the Foolish Four. Delicious, isn't it?

(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

Stock  Change   Last
--------------------
T    -   1/4   49.50
GM   +   1/4   71.56
CHV  -1  3/8   86.44
MMM  +5 13/16  100.63

           Day   Month    Year
                  Day   Month    Year
        FOOL-4   +0.66%   8.44%  25.98%
        DJIA     -0.32%   1.13%  24.60%
        S&P 500  -0.39%   2.24%  30.75%
        NASDAQ   -0.27%   1.32%  32.30%

    Rec'd   #  Security     In At       Now    Change
   1/2/97  153 Chevron       65.00     86.44    32.98%
   1/2/97  179 Gen. Motor    55.75     71.56    28.36%
   1/2/97  120 3M            83.00    100.63    21.23%
   1/2/97  479 AT&T          41.75     49.50    18.56%


    Rec'd   #  Security     In At     Value    Change
   1/2/97  479 AT&T       19998.25  23710.50  $3712.25
   1/2/97  153 Chevron     9945.00  13224.94  $3279.94
   1/2/97  179 Gen. Motor  9979.25  12809.69  $2830.44
   1/2/97  120 3M          9960.00  12075.00  $2115.00


                             CASH   $1167.51
                            TOTAL  $62987.64