CONFERENCE CALLS

None

FOOL PLATE SPECIAL

Beverage, snack food and restaurant giant PEPSICO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PEP)") else Response.Write("(NYSE: PEP)") end if %> slipped $1 1/8 to $28 7/8 after Goldman Sachs decided to yank the firm from its Recommended List this morning, downgrading it to "moderate outperform." Although the firm did not disclose why they had made the move, they did trim 1996 and 1997 estimates by two cents, now calling for $1.38 EPS in 1996 and $1.58 EPS in 1997. This move follows a similar cut by Morgan Stanley yesterday, which sliced 1996 by two cents to $1.38 EPS and 1997 net two cents to $1.61 EPS. Morgan cited lower expectations for the company's Taco Bell and Pizza Hut units, although for many investors it is the international beverage operations that are most prominent in their minds.

The packaged consumer goods firm has been under heavy pressure all week after COCOA-COLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> ambushed the company in Venezuela, stealing away its major bottler in South America, the Cisneros Group. Cisneros and Coca-Cola announced their intention to form a $500 million joint venture last Friday, causing many on the Street to question PepsiCo's Latin American strategy for its beverages. Some even suggested PepsiCo had blundered negotiations with the bottler, failing to inject capital into the family-owned bottling business. PepsiCo vehemently denied these rumors and said that Cisneros had not even returned its chief executive's calls in the past few months -- making one wonder how PepsiCo could really call the Coke deal such a surprise.

PepsiCo is not willing to give up too easily, and still has a contract with Cisneros that was supposed to last until 2003. It has asked the Venezuelan government to intervene in order to block what the firm calls "an unfair monopoly." PepsiCo is seeking a $118 million penalty for the defection and believes that it will round up another Venezuelan bottler in the next 45 days. Venezuelan beer bottler Empresas Polar and Colombian Pepsi-bottler Ardila Lule are rumored to have expressed interest. Analysts suggest that after a move to another bottler, it would cost PepsiCo $400 million to return to its previous level of output.

People love to compare PepsiCo to Coca-Cola as both are the only way to get involved in global soft drink franchises. PepsiCo's capital intensive restaurant units, strategically necessary to guarantee PepsiCo can sell its beverages through some fast-food outlets, really make the comparison a stretch. PepsiCo's free cash flow is restricted because of the capital investment the restaurant business requires, and its return on equity is impaired as well. Lost in all of this, however, is Pepsi's Frito-Lay unit. The salted snack foods behemoth lost its second biggest competitor a few months ago when ANHEUSER-BUSCH'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BUD)") else Response.Write("(NYSE: BUD)") end if %> Eagle Snacks unit closed down. In fact, Frito-Lay is scooping up many of its former competitors factories on the cheap. Frito-Lay is a global brand franchise for packaged consumer goods that are made for a penny and sold for a dollar. The only things that you can compare this incredible business with are soft drinks and cigarettes. Investors might be best served by figuring out how much each PepsiCo unit is worth on its own, instead of concentrating on the aggregate earnings of the company as many investors are.

UPS

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RED LION HOTELS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RL)") else Response.Write("(NYSE: RL)") end if %>, not to be confused with RED LION INNS <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: RED)") else Response.Write("(AMEX: RED)") end if %>, is up $3 1/2 to $27 1/8 after IT announced it was in talks to be bought out by DOUBLETREE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TREE)") else Response.Write("(NASDAQ: TREE)") end if %>.

New Jersey-based bank holding company BMJ FINANCIAL CORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BMJF)") else Response.Write("(NASDAQ: BMJF)") end if %> is being snapped up by New Jersey's largest remaining independent bank, SUMMIT BANCORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SUB)") else Response.Write("(NYSE: SUB)") end if %>, in an effort to solidify its market share. BMJ Financial rose $6 to $20 on news that it would be purchased with 0.56 shares of Summit.

AMTROL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMTL)") else Response.Write("(NASDAQ: AMTL)") end if %> surged $7 to $27 1/4 after announcing that is was going to be acquired by A.I. Acquisition Inc., an affiliate of a private equity fund known as Cypress Group. The deal calls for Amtrol shares to be purchased for $28.25 in cash apeice.

Investors were excited today that SIERRA SEMICONDUCTOR (SERA: NASDAQ) decided to get out of one of its more competitive businesses, modem chipsets, rising $2 3/8 to $11 5/8. ROCKWELL INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ROK)") else Response.Write("(NYSE: ROK)") end if %> dominates this market. Sierra will lay off 150 employees and its president and chief executive has resigned.

CHESAPEAKE ENERGY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHK)") else Response.Write("(NYSE: CHK)") end if %>, jumped $2 3/8 to $58 3/8, defying the naysaying of its numerous short-sellers and besting consensus estimates by a nickel, reporting $0.23 EPS versus the $0.18 EPS that analysts were looking for. The oil and gas driller has been the subject of a number of skeptical peices in Barron's.

A coup for computer-aided design firm STRUCTURAL DYNAMICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SDRC)") else Response.Write("(NASDAQ: SDRC)") end if %> has shares up $2 3/16 to $25 7/16 today. The big news is that FORD MOTOR CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> will use its software in new computer-aided design project.

NATIONAL SEMICONDUCTOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NSM)") else Response.Write("(NYSE: NSM)") end if %> got some support from Lehman Brothers and Prudential Securities as both brokerage firms upgraded shares of the semiconductor manufacturer. Shares rose $1 3/8 to $17 3/4 today in brisk trading.

Another acquisition announced today has shares of the acquirer up. BAXTER INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAX)") else Response.Write("(NYSE: BAX)") end if %> rose $2 to $44 7/8 after it said it would buy Switzerland's Immuno International AG for $715 million over the next three years. Baxter believes the deal will be non-dilutive to earnings, always a positive sign.

DOWNS

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HOUSECALL MEDICAL RESOURCE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HSCL)") else Response.Write("(NASDAQ: HSCL)") end if %> was crushed for $7 15/16 to $6 9/16 today after pre-announcing a fourth quarter loss, indicating it could not give guidance for the future until it reported those numbers in two weeks. Morgan Stanley, which helped bring the company public in April, downgraded the shares last night to "underperform".

Stating that it expected "little if any growth in service revenues over the next six months," INFERENCE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: INFR)") else Response.Write("(NASDAQ: INFR)") end if %> was squashed for $1 3/8 to $13 3/8. The consulting firm has lost a customer that represented 6% of service revenues last quarter.

SODAK GAMING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SODK)") else Response.Write("(NASDAQ: SODK)") end if %> finally gave up some ground after a three day run, slipping $1 /34 to $46 on no news. Earlier in the week a big contract with the Brazilian Soccer Federation to provide electronic gaming juiced up the gaming manufacturer's stock.

Another stock off in profit taking from earlier moves this week is CENTOCOR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CNTO)") else Response.Write("(NASDAQ: CNTO)") end if %>, slipping $2 to $34 3/8. Centocor announced some preliminary data from its trials for a drug called ReoPro that got the market pretty excited earlier in the week.

PETROLEUM GEO-SERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PGSAY)") else Response.Write("(NASDAQ: PGSAY)") end if %> was knocked down $1 5/8 to $27 1/4 this morning after announcing a proposed secondary offering of 4.6 million shares of the American Depository Receipts (ADRs). There are currently about 26.5 million shares of the oilfield services firm outstanding.

Shares of digital video compression technology firm C-CUBE MICROSYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CUBE)") else Response.Write("(NASDAQ: CUBE)") end if %> slipped $15/16 to $36 5/8, perversely on the day that Japanese consumer electronics giant Matsushisti announced when it would release its first digital video player in North America. C-Cube also completed its acquisition of DiviCom this morning.

ANOTHER FOOLISH THING: The Networking Industry Area

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3Com, Amati, Ancor, Bay Networks, C-Cube, Cabletron, Cascade, Cisco, Fore, Lucent, Madge, MFS, Raptor, Sun, Telebit, US Robotics... <gasp for air here> ... what do all these companies have in common, other than the fact that they're followed by many Fools? Well, they're all networking companies, and they're all discussed in the Fool's Networking Industry nook. Hosted by the illustrious MFs MOM and Networx, this is one happening area. Head over there and read overviews on "The Future of Networking" and "Investing in a Paradigm Shift." Read stock reports on many of the above companies. Confused by the strange terminology (ADSL, VDSL, Fibre channel, bandwidth, Ethernet, etc.)? Want some ideas on how to value networking companies? Want to understand what all the fuss about cable modems is really about? From ACT Networks to Xylan, Ascend to Xircom, the Networking Industry area covers them all -- check it out at keyword: FoolNet. AOL 3.0 for Windows users can just click here.

Randy Befumo (MF Templar), a Fool

Selena Maranjian (MF Selena) another Fool