DJIA              9012.30   +17.44     (+0.19%) 
 S&P 500           1109.69    -0.98     (-0.09%) 
 Nasdaq            1824.94    +4.70     (+0.26%) 
 Value Line Index   979.42    +3.85     (+0.39%) 
 30-Year Bond    102 22/32   -22/32  5.93 Yield 
 

HEROES

The continued consolidation among U.S. companies in the financial arena boosted several stocks today following the announcement of two large-scale banking mergers. BankAmerica Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAC)") else Response.Write("(NYSE: BAC)") end if %> rose $4 5/8 to $91 1/8 and NationsBank <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NB)") else Response.Write("(NYSE: NB)") end if %> gained $4 3/16 to $80 5/8 after the two banks agreed to merge in a deal valued at more than $60 billion. Meanwhile, First Chicago NBD Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FCN)") else Response.Write("(NYSE: FCN)") end if %> picked up $2 1/4 to $96 1/4 after agreeing to a $29 billion deal with Banc One Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ONE)") else Response.Write("(NYSE: ONE)") end if %>. Believing that the "urge to merge" will soon spread to others in the finance biz, investors drove shares of other financial stocks higher as well. First Union <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FTU)") else Response.Write("(NYSE: FTU)") end if %> advanced $2 3/16 to $59 1/8, Mellon Bank Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MEL)") else Response.Write("(NYSE: MEL)") end if %> climbed $3 15/16 to $73, and Chase Manhattan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMB)") else Response.Write("(NYSE: CMB)") end if %> rose $4 3/4 to $146 3/8. Wells Fargo <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WFC)") else Response.Write("(NYSE: WFC)") end if %> added $18 13/16 to $370 15/16, Fleet Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FLT)") else Response.Write("(NYSE: FLT)") end if %> jumped $3 5/16 to $88 1/4, Morgan Stanley Dean Witter <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MWD)") else Response.Write("(NYSE: MWD)") end if %> rose $2 3/8 to $84 7/16, and J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JPM)") else Response.Write("(NYSE: JPM)") end if %> gained $7 1/16 to $147 5/8.

Shares of several Internet commerce-related companies rose today, driven by continued positive expectations for the group following better-than-expected earnings by Yahoo! Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> on Thursday. Internet search engine company Excite Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> climbed $5 3/4 to $68 7/8. Excite has decided to follow the lead of Yahoo! in becoming an aggregator, or "portal," of Internet content by allowing its users to tailor Excite's home page to their desired needs. Meanwhile, Internet advertising firm THINK New Ideas <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: THNK)") else Response.Write("(Nasdaq: THNK)") end if %> gained $1 5/8 to $34 7/8 and Go2Net Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GNET)") else Response.Write("(Nasdaq: GNET)") end if %> tacked on $4 to $26 3/8. Entertainment products distributor K-tel International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KTEL)") else Response.Write("(Nasdaq: KTEL)") end if %> surged $8 5/16 to $14 15/16 after announcing late last week that it would offer over 250,000 music titles through its K-tel Express website starting in May. And in a related matter, travel agency 800 Travel Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IFLY)") else Response.Write("(Nasdaq: IFLY)") end if %> rose $2 9/32 to $9 1/4 after its board authorized the development of an online travel reservation service.

QUICK TAKES: Zip and Jaz drive maker Iomega Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IOM)") else Response.Write("(NYSE: IOM)") end if %> was up $5/16 to $6 7/8 as Japan's Fujitsu PC Corp. agreed to include modular notebook Zip drives as standard equipment with Fujitsu's LifeBook line of notebook computers... Merrill Lynch <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MER)") else Response.Write("(NYSE: MER)") end if %> rose $4 1/16 to $99 after reporting fiscal Q1 EPS of $1.30, beating the First Call mean estimate of $1.14... Toronto-based theater operator and live entertainment company Livent Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LVNTF)") else Response.Write("(Nasdaq: LVNTF)") end if %> climbed $2 1/2 to $10 3/8 after ex-super agent and former Walt Disney <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %> president Michael Ovitz agreed to invest $20 million in the company... Electronic equipment rental company Electro Rent Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELRC)") else Response.Write("(Nasdaq: ELRC)") end if %> surged $7 5/8 to $53 after reporting fiscal Q3 EPS of $0.85, up 81% from the $0.47 earned a year ago. The company also said it would split its stock two-for-one effective May 12.

CommNet Cellular <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CELS)") else Response.Write("(Nasdaq: CELS)") end if %> soared another $17 to $85 following the wireless phone network operator's announcement last week of a five-for-one stock split... Crown Pacific Partners L.P. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRO)") else Response.Write("(NYSE: CRO)") end if %> climbed $2 1/16 to $26 7/8 after the owner of timberlands told the Wall Street Journal that it will meet the Street's earnings estimate of $1.06 per share in fiscal 1998... Database and systems management company Platinum Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PLAT)") else Response.Write("(Nasdaq: PLAT)") end if %> advanced $2 5/16 to $27 after saying it expects to report fiscal Q1 EPS of about $0.05... Database software developer Oracle Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %> rose $1 1/2 to $28 7/16 and semiconductor manufacturing equipment maker KLA-Tencor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KLAC)") else Response.Write("(Nasdaq: KLAC)") end if %> gained $1 7/8 to $39 on no news that we could find. Paper manufacturer International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> also picked up $2 13/16 to $51 for reasons unbeknownst to us.

GreenPoint Financial Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPT)") else Response.Write("(NYSE: GPT)") end if %> advanced $2 1/2 to $40 5/8 after the specialty finance company agreed to buy BankAmerica's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAC)") else Response.Write("(NYSE: BAC)") end if %> manufactured housing loan unit for $703 million in cash... Brokerage firm and investment bank Paine Webber Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PWJ)") else Response.Write("(NYSE: PWJ)") end if %> rose $2 1/16 to $45 15/16 after reporting fiscal Q1 EPS of $0.77, beating the Street estimate of $0.67... Donaldson, Lufkin & Jenrette <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DLJ)") else Response.Write("(NYSE: DLJ)") end if %> was lifted $7 3/8 to $101 1/4 after the brokerage firm reported fiscal Q1 EPS of $2.00, beating the Street estimate of $1.49. Revenues from the firm's merchant banking operations were up sharply, rising to $41.2 million from $847,000 a year ago.

Video teleconferencing equipment maker PictureTel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PCTL)") else Response.Write("(Nasdaq: PCTL)") end if %> climbed $5/8 to $6 15/16 after a jury ruled in favor of the company late last week in a patent infringement suit brought by voice and video communications firm Datapoint Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DPT)") else Response.Write("(NYSE: DPT)") end if %>... Fastener maker Fastenal Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FAST)") else Response.Write("(Nasdaq: FAST)") end if %> gained $5 3/8 to $46 1/4 after reporting fiscal Q1 EPS of $0.33, beating the First Call mean estimate of $0.31. Lower prices for imports from Asian suppliers helped improve margins, the company said... Bowling Green, Kentucky-based Trans Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TRFI)") else Response.Write("(Nasdaq: TRFI)") end if %> rose $2 1/2 to $55 1/8 after agreeing to be acquired by fellow retail bank Star Banc Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STB)") else Response.Write("(NYSE: STB)") end if %> in a stock swap valued at $696 million.

Technical software and workstation hardware developer Intergraph Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INGR)") else Response.Write("(Nasdaq: INGR)") end if %> gained $1 1/4 to $9 after a federal court handed down an injunction against Intel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> in an antitrust and patent infringement between the two firms... Seaway Food Town <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEWY)") else Response.Write("(Nasdaq: SEWY)") end if %> moved up $1 1/2 to $28 5/8 after the supermarket chain set a three-for-two stock spilt... Retail bank holding company BancFirst Ohio Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BFOH)") else Response.Write("(Nasdaq: BFOH)") end if %> jumped $4 1/2 to $53 on announcing a two-for-one stock split... Regional freight hauler American Freightways Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AFWY)") else Response.Write("(Nasdaq: AFWY)") end if %> motored $15/16 higher to $12 after reporting fiscal Q1 EPS of $0.10, which was ahead of the First Call mean estimate of $0.06 for the quarter.

Home furnishings accessories manufacturer Conso Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNSO)") else Response.Write("(Nasdaq: CNSO)") end if %> tacked on $1 13/16 to $9 15/16 after receiving a favorable write-up in the latest edition of Barron's... Northstar Computer Forms <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCF)") else Response.Write("(Nasdaq: NSCF)") end if %> announced a three-for-two stock split, sending shares of the security documents and bank forms company $2 7/8 higher to $21 7/8.

Ratings Movers: Dreyer's Grand Ice Cream <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DRYR)") else Response.Write("(Nasdaq: DRYR)") end if %> rose $1 3/8 to $24 after Hambrecht & Quist upgraded the ice cream maker to "buy" from "hold"... Exodus Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EXDS)") else Response.Write("(Nasdaq: EXDS)") end if %> added $4 to $40 1/8 after Goldman Sachs started coverage of the provider of Internet services to businesses with a "market outperform" rating. BT Alex. Brown started coverage of the stock with a "buy" rating... Inland Steel Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IAD)") else Response.Write("(NYSE: IAD)") end if %> rose $3 to $29 13/16 after Salomon Smith Barney raised its rating on the steel products and materials management company to "buy" from "outperform" and set a 12-month price target of $41 per share.

Metals and materials processor Ryerson Tull <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RT)") else Response.Write("(NYSE: RT)") end if %> gained $2 1/8 to $20 3/4 after Salomon Smith Barney upgraded the stock to "buy" from "neutral," with a 12-month price target of $31 per share... Printed circuit board contract manufacturer Jabil Circuit <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JBIL)") else Response.Write("(Nasdaq: JBIL)") end if %> was lifted $3 11/16 to $34 1/2 after BT Alex. Brown upgraded the stock to "buy" from "market perform"... Pet supplies retailer PETsMART Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PETM)") else Response.Write("(Nasdaq: PETM)") end if %> jumped $11/16 to $11 5/8 after Johnson Rice started coverage of the stock with a "buy" rating.

GOATS

Boeing <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BA)") else Response.Write("(NYSE: BA)") end if %> dipped $1 9/16 to $53 5/8 on heavier-than-usual trading after the defense contractor and the world's largest commercial aircraft maker's McDonnell Douglas Corp. lost out on a $2 billion cruise missile contract to rival Lockheed Martin <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LMT)") else Response.Write("(NYSE: LMT)") end if %>. In addition, Boeing also announced last Thursday that it will take another $350 million charge on Q1 earnings to cover production problems with its next-generation 737 program. The company had already announced $2.6 billion in charges related to production snags. All this comes when the company is gearing up to double its production of 737s to 14 aircraft a month in the second quarter, and increase the number to 21 a month later this year. How the company performs against the plan "will determine whether further charges are necessary," the company said. Standard & Poor's placed Boeing's long-term ratings on CreditWatch with negative implications, citing the company's "continued production difficulties and their adverse impact on profitability."

Cigar companies were burned today on news that the Federal Trade Commission chief wants Congress to regulate stogies as it does cigarettes by requiring health warnings on all cigar ads and packaging and prohibiting cigar makers from targeting teenagers in their marketing. Anti-cigar forces are touting a 232-page National Cancer Institute report released Friday showing a 50% increase in cigar smoking since 1993 and a high risk of mouth, throat, and lung cancer. Consolidated Cigar Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CIG)") else Response.Write("(NYSE: CIG)") end if %> was smoked for $15/16 to $14 11/16; General Cigar Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MPP)") else Response.Write("(NYSE: MPP)") end if %> was extinguished for $3/4 to $13 15/16; and Swisher International Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SWR)") else Response.Write("(NYSE: SWR)") end if %> lost $3/8 to $10 9/16.

QUICK CUTS: Semiconductor maker Advanced Micro Devices <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AMD)") else Response.Write("(NYSE: AMD)") end if %> fell $1 5/16 to $25 5/16 after Standard & Poor's downgraded the company's bank loan, senior secured debt, and corporate rating to single-'B' from double-'B'-minus. S&P also deemed the outlook for AMD to be negative... Conseco Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CNC)") else Response.Write("(NYSE: CNC)") end if %> slid $2 1/16 to $48 as a group of investors have filed a class action suit against the insurance company and Sands Brothers & Co. for allegedly scheming to defraud stockholders... Temporary relocation consolidator Global Business Resources <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GLBE)") else Response.Write("(Nasdaq: GLBE)") end if %> plunged $2 3/8 to $11 1/8 after announcing it anticipates Q4 earnings of about $0.03 per share, compared with $0.21 for the prior-year period and the First Call mean EPS estimate of $0.13.

Electronic communications media systems maker Aydin Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AYD)") else Response.Write("(NYSE: AYD)") end if %> plummeted $3 1/2 to $9 3/4 after announcing that a panel has ruled against it in the arbitration proceedings between the company and Loral Defense Systems-Eagan, now Lockheed Martin's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LMT)") else Response.Write("(NYSE: LMT)") end if %> Tactical Systems, awarding Lockheed more than $17.1 million, which the company said appears likely to impact Q1 earnings and lead to a "substantial loss"... Information security and wireless communication products provider Transcrypt International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TRII)") else Response.Write("(Nasdaq: TRII)") end if %> sank $1 3/16 to $9 after announcing a further delay in filing its 10-K with the SEC. The Audit Committee has retained independent counsel to conduct an investigation and will bring in another major independent accounting firm to review the accounting treatment of certain transactions in question.

Israel-based telecommunications network equipment manufacturer Teledata Communication <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLDCF)") else Response.Write("(Nasdaq: TLDCF)") end if %> dropped $1 7/8 to $13 1/4 after announcing that it expects a Q1 loss of $0.18 to $0.23 a share versus a profit of $0.23 per share in Q1 1997. The First Call mean estimate was a loss of $0.04... Digital color printing technologies developer Electronics for Imaging <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EFII)") else Response.Write("(Nasdaq: EFII)") end if %> lost $2 1/8 to $21 13/16 after reporting Q1 EPS of $0.08, down from $0.37 for the year-earlier period. The First Call mean estimate was $0.05... QuadraMed Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QMDC)") else Response.Write("(Nasdaq: QMDC)") end if %> sank $3 7/8 to $26 as the healthcare management software and services company announced plans to make a Rule 144A offering of $100 million of Convertible Subordinated Debentures due 2005.

Enterprise graphics software company Micrografx Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MGXI)") else Response.Write("(Nasdaq: MGXI)") end if %> fell $1 7/16 to $12 3/8 after announcing it was denied an interim injunction filed against Corel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COSFF)") else Response.Write("(Nasdaq: COSFF)") end if %> to stop the competitor from using its copyrighted works... Smartflex Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFLX)") else Response.Write("(Nasdaq: SFLX)") end if %> slipped $1 to $8 3/4 after the electronic manufacturing services company reported Q1 earnings of $0.13 per share, compared with $0.04 for the year-earlier period and the First Call mean EPS estimate of $0.09... SPR Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPRI)") else Response.Write("(Nasdaq: SPRI)") end if %> dropped $2 5/8 to $29 after the information technology services company's chairman and other shareholders filed with the SEC to sell 2.2 million shares.

Electronic publisher IVIP Publishing <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IVIP)") else Response.Write("(Nasdaq: IVIP)") end if %> shed $9/16 to $7 after reporting a Q4 loss of $0.89 per share versus a loss of $0.28 for the prior-year period... WinStar Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCII)") else Response.Write("(Nasdaq: WCII)") end if %> fell $2 1/4 to $40 1/8 after Morgan Stanley Dean Witter lowered its rating on the telecommunications company to "neutral" from "outperform"... Mastech Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MAST)") else Response.Write("(Nasdaq: MAST)") end if %> skidded $2 3/8 to $26 5/8 after Goldman Sachs lowered its rating on the information technology services company to "market outperform" from "trading buy."

FOOL ON THE HILL
An Investment Opinion
by Jim Surowiecki

A Look at Fed Ex

When it absolutely, positively has to be in North Carolina, the state is more than happy to come up with the money. At least that's one conclusion you can draw from today's announcement that Federal Express, subsidiary of holding company FDX <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FDX)") else Response.Write("(NYSE: FDX)") end if %>, will be building a $300 million air traffic and package-sorting hub in Greensboro, the sixth such hub FedEx has built since it began decentralizing operations from its home in Memphis, Tennessee. In order to win the facility, North Carolina came up with tax breaks and incentives that could be worth as much as $135 million over the next two decades, giving it its first big victory in the ongoing battle among Southern states over industrial recruitment.

While $135 million seems like rather a steep price tag for a hub that will create fewer than 2,000 jobs -- most of those part-time -- the ancillary effects from FedEx's arrival could be important, particularly in terms of North Carolina's attempt to remake itself into a high-tech state. That's because FedEx has come to play an increasingly crucial role in reshaping the manufacturing and distribution operations of many businesses, allowing companies to move toward just-in-time manufacturing processes and to do a better job of matching production to consumer demand. The same software that allows you to track the FedEx package you sent this morning allows companies to track parts shipments and product inventory, and to ensure that they're not stuck with unsold goods. At a time when companies like 3Com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> and Compaq <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> have had inventory channel problems that have had a material effect on earnings, and when the made-to-order business of Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> is reshaping the entire PC industry, the local presence of a FedEx hub is not simply a nice luxury, but could serve as a magnet for all sorts of other businesses.

Curiously, for all of its public presence, FedEx is one of the great unsung stories of the networked age. More than most high-tech companies, the delivery behemoth has been able to integrate bleeding-edge technology into what remains a fundamentally mundane business -- picking up a package and physically delivering it somewhere else -- and in doing so has made itself into a fundamental long-term player in the global economy. More important, as North Carolina's affection for it suggests, is FedEx's ability to use its expertise in information technology to reengineer its clients' supply and production lines. For example, FedEx actually coordinates the assembly and shipping of Dell's computers in the Far East. At the same time, the company has moved aggressively onto the Internet, working with early adopters to manage sales over the Web and establish a strong position as the delivery company of the Net.

Just as impressive from a long-term standpoint has been the company's successful effort to reduce transaction costs by having its customers label their own packages before contacting FedEx for a pickup. At every turn, in fact, FedEx has done an impressive job of making itself more efficient, while it recently figured out how to mine its databases to weed out unprofitable customers and to rationalize its price structure by introducing distance-based pricing. And, as the size of its investment in the Greensboro hub demonstrates, FedEx is not shy about spending money in the present in order to ensure that it remains technologically and geographically ahead of the game.

That has meant, at different times, short-term hits to the company's earnings. In the past quarter, for instance, a dramatic and ultimately necessary expansion in FedEx's international capacity was partly responsible for a loss in its international operations, a loss that was also obviously due to continued weakness in Asia, where FedEx has a burgeoning operation. On the other hand, the past quarter saw operating earnings in the U.S. rise more than 50%, with domestic package volume jumping an impressive 7.5% year-over-year and revenue-per-package rising a third faster than costs. FDX also saw an impressive performance from Caliber Logistics and Caliber Technology, two new acquisitions that solidified FDX's position in the information services market. Overall, FDX saw earnings -- excluding merger-related charges -- jump 38%, a solid performance from a company trading at a significant discount to the market as a whole, with its P/E ratio of just 20.

Still, FDX's real strength is long term. While the mundaneness of its core business has obscured its actual position in the so-called New Economy, there are few companies in the world better suited to take advantage of the rise of a globalized, networked economy in which there will is a premium on speed and responsiveness. FedEx's continued program of expansion into regional hubs fits well into its broader strategy of decentralization, while also strengthening its ability to shorten the time between pickup and delivery. It's somewhat ironic that the advent of e-mail and faxes has only increased the market for the delivery of paper and goods. But unless you believe that the new world will be truly virtual, FDX should be commanding your attention.

CONFERENCE CALLS

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Yi-Hsin Chang (TMF Puck), a Fool
Brian Graney (TMF Panic), Fool Two
Alex Schay (TMF Nexus6), Fool, too
Dale Wettlaufer (TMF Ralegh), Final Fool
Jim Surowiecki (TMF Cinder), Final Fool, too
Contributing Writers

Brian Bauer (TMF Hoops), another Fool
Jennifer Silber (TMF Amused), Fool at last
Editing