FOOL PLATE SPECIAL
An Investment Opinion by Randy Befumo

AMD Looks Ahead

Jerry Sanders is not having a good day today. Although things are certainly looking up over the next few months for ADVANCED MICRO DEVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AMD)") else Response.Write("(NYSE: AMD)") end if %>, the semiconductor manufacturer Sanders founded after leaving Fairchild in the 1970s, the profits are not flowing in as fast as previously anticipated. AMD slumped $3 to $35 7/8 after announcing that it anticipates reporting a slight loss in the third quarter. Roughly twenty different analysts had been looking for an average of a $0.31 EPS. AMD produced one million K6 MMX-enhanced central processing units (CPUs) in its third quarter, roughly three times the 350,000 units it sold last quarter. Unfortunately, this level of output is on the low-end of what the company had expected and does not give it enough volume to overcome the fixed costs in producing the microprocessor.

The reason the company's shares are not being completely wiped out by today's disappointment is because of the forward-looking information contained in today's press release. AMD's current weekly output is 150,000 K6 units a week, which should allow the company to produce two million of the pikers in the fourth quarter. If the company is only going to produce a slight loss with one million units, many investors are probably speculating that this means that the company is close to covering its fixed costs and that the next million units could contain a lot of gravy that will flow down to the company's bottom line. With 18.9 microprocessors sold last quarter in the PC market alone, not counting the close to two million servers and 300,000 workstations that use multiple CPUs, AMD is producing only two to three percent of the total market, possibly heading to five to six percent in the next few quarters.

The only downside is that many of AMD's customers are losing market share to companies that do not currently buy from AMD. The second-tier PC manufacturers that have licensed the K6 include Acer, Digital, Fujitsu, Peacock, Siemens-Nixdorf, Trigem, and Vobis. According to industry reports, it is exactly these mid-tier manufacturers that have been losing market share in the worldwide computer market. This certainly all makes sense as these would naturally be the manufacturers that are price conscious enough to opt for AMD. Although IBM has also licensed the K6 from AMD, it is currently only using it for the lower priced, stripped-down Aptiva model, a product targeted at low-end consumers, not the higher-end products that it is selling to businesses. Even at two million units in low-end PCs, the K6-MMX could mean a lot for AMD's results, but all the noise about being an "Intel killer" will be just that -- noise -- until the company convincing breaks into higher-margin PCs targeted for corporations and market share is measured in more than single digits.

UPS

PENN TRAFFIC CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PNF)") else Response.Write("(NYSE: PNF)") end if %> gorged itself for a $5/8 gain to $8 1/2 as the supermarket operator reported a 2Q EPS share loss of $0.93, versus estimates of a loss of $1.22.

PaineWebber analyst Sam Buttrick started coverage of the holding company for America West Airlines, AMERICA WEST HOLDINGS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AWA)") else Response.Write("(NYSE: AWA)") end if %>, with a "buy" rating, boosting shares $1/2 to $13 1/4.

Shares of VAUGHN COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VGHN)") else Response.Write("(Nasdaq: VGHN)") end if %> moved $5/8 higher to $8 1/8 this morning as the high-volume videotape duplicator was upgraded by John G. Kinnard from a "neutral" rating to a "buy."

ALYN CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALYN)") else Response.Write("(Nasdaq: ALYN)") end if %>, a producer of advanced metal matrix composite materials, sparked $1 1/2 higher to $9 7/8 on announcing the signing of an exclusive customer agreement with True Temper Sports for tubing to be custom drawn for bicycle frame sets and other tube components.

NATURAL WONDERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NATW)") else Response.Write("(Nasdaq: NATW)") end if %> was boosted $7/8 to $5 1/4 as the specialty gift merchandiser said its board had authorized the repurchase of up to $2 million worth of its common stock during the next 12 months.

KOPIN CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KOPN)") else Response.Write("(Nasdaq: KOPN)") end if %> rose $1 7/8 to $23 after the company announced a multi-year, multi-million dollar business agreement with MOTOROLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %> under which the companies will develop, manufacture, and market low-cost, flat panel display products based on Kopin's CyberDisplay(TM) active matrix LCD technology.

EIDOS PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EIDSY)") else Response.Write("(Nasdaq: EIDSY)") end if %> jumped $1 1/8 to $9 7/8 as the worldwide developer and publisher of interactive entertainment products announced the appointment of Mike McGarvey as worldwide chief operations officer of Eidos Interactive, the largest division of the London-based company.

A 25.5% increase in August same-store sales for women's casual clothing retailer CHICOS FAS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHCS)") else Response.Write("(Nasdaq: CHCS)") end if %> marked up the company's shares $5/8 to $7 3/8.

FIELDWORKS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FWRX)") else Response.Write("(Nasdaq: FWRX)") end if %> inked a deal with IBM Canada yesterday whereby FieldWorks will supply IBM Canada with application-specific computing solutions for resale worldwide. FieldWorks shares are up $5/8 to $6 3/8.

AML COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMLJ)") else Response.Write("(Nasdaq: AMLJ)") end if %> made a connection with investors this morning, rising $7/16 to $6 3/8 on news that it had received orders totaling $900,000 from two major wireless customers for multicarrier power amplifiers and paging amplifiers.

Manufacturer and designer of women's apparel NORTON MCNAUGHTON <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NRTY)") else Response.Write("(Nasdaq: NRTY)") end if %> rose $1/2 to $5 7/8 after stating that it had entered into a definitive agreement to acquire all the assets and assume the liabilities of Miss Erika Inc., a privately held apparel manufacturer.

Casual dining and fast food concern QUALITY DINING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QDIN)") else Response.Write("(Nasdaq: QDIN)") end if %> climbed $3/4 to $6 1/2 as the company announced the spin-off of its Bruegger's bagel operations.

Clothier AMERICAN EAGLE OUTFITTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AEOS)") else Response.Write("(Nasdaq: AEOS)") end if %> rose $1 to $25 after announcing August same-store sales increased 47%.

Shares of computer-based instructional systems TRO LEARNING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TUTR)") else Response.Write("(Nasdaq: TUTR)") end if %> gained $3/4 to $9 3/4 after it announced last night that it has been awarded a contract by the U.S. Navy to install PLATO courseware in 52 Academic Skills Learning Centers worldwide.

CELL GENESYS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CEGE)") else Response.Write("(Nasdaq: CEGE)") end if %> announced today that the company has received a notice of allowance from the Patent and Trademark Office for a broad patent covering "all gene therapy products that utilize adeno-associated virus (AAV) vectors to deliver genes as therapeutic agents," moving the stock higher $3/8 to $5 7/16.

Shares of fat-tube aluminum bike maker CANNONDALE CORP (Nasdaq BIKE) rose $1 3/16 to $19 1/2 on news that the company will repurchase up to $1 million common shares "from time to time in the open market or in private transactions."

Liam Dalton made favorable comments about LORAL SPACE & COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LOR)") else Response.Write("(NYSE: LOR)") end if %> this morning on CNBC, boosting the stock of the satellite and communications company $1 3/8 to $19 3/8.

MEDIALINK WORLDWIDE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MDLK)") else Response.Write("(Nasdaq: MDLK)") end if %>, a producer, distributor, and promoter of video news releases for corporations, rose $2 7/8 to $14 after a favorable article in today's Investor's Business Daily.

DOWNS

Information technology consulting company AMERICAN MANAGEMENT SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMSY)") else Response.Write("(Nasdaq: AMSY)") end if %> lost $6 5/16 to $18 5/16 after releasing guidance lowering 1997 EPS estimates to a range of $0.72 to $0.81 from a range of $0.95 to $1.03. The company said a sudden contract cancellation from Swiss Telecom is to blame for the lower estimate.

CARDIOTHORACIC SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CTSI)") else Response.Write("(Nasdaq: CTSI)") end if %> plunged $2 3/4 to $8 after the maker of minimally invasive cardiothoracic surgery devices said it expects Q3 revenues to fall "significantly below analysts' estimates."

Semiconductor mask generation systems maker ETEC SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ETEC)") else Response.Write("(Nasdaq: ETEC)") end if %> slid $6 to $59 after reporting Q3 EPS of $0.54, beating estimates. The company said it expects revenues in the coming quarter to be flat to slightly down and earnings to fall because of capacity constraints and higher-expense system sales.

INTUIT INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTU)") else Response.Write("(Nasdaq: INTU)") end if %> declined $2 3/16 to $26 7/16 after the financial software and increasingly web-oriented company reported a Q4 operating loss of $0.17 per share, slightly ahead of estimates. Q4 revenues grew 10% and the company also announced a restructuring of technical support operations in Europe and the U.S.

PC catalogue retailer MICRO WAREHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MWHS)") else Response.Write("(Nasdaq: MWHS)") end if %> fell $1 3/4 to $28 after the company announced a $30 million settlement of a class action lawsuit over Micro Warehouse's accounting boo-boos, in which inventories were understated and profits were overstated in the last few years. ORTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORTL)") else Response.Write("(Nasdaq: ORTL)") end if %> dropped $1 3/8 to $22 3/4 after the telecom equipment manufacturer reported Q1 EPS of $0.12, beating estimates of $0.11.

Power producer GREEN MOUNTAIN POWER CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GMP)") else Response.Write("(NYSE: GMP)") end if %> lost $3 13/16 to $22 1/4 this morning after yesterday's announced reduction in the quarterly dividend from $0.53 per share to $0.275 per share.

Same-store sales in the month of August plunged 22% for clothing retailer ANNTAYLOR STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ANN)") else Response.Write("(NYSE: ANN)") end if %>, and the stock fell $2 1/8 to $14 3/4 in tandem with the dive in comp sales.

Standard & Poor's today revised its ratings outlook on WESTBRIDGE CAPITAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WBC)") else Response.Write("(NYSE: WBC)") end if %> to negative from stable, which de-stabilized shares of the health insurance underwriter $7/16 to $5 3/8.

AMWAY ASIA PACIFIC LTD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AAP)") else Response.Write("(NYSE: AAP)") end if %> fell $1 13/16 to $30 7/16 after reporting that sales and net income for the fourth quarter ended August 31 are expected to decline from a year ago due to currency devaluations in Southeast Asia and weakness in China net sales.

Smith Barney portfolio strategists said they viewed GENERAL MOTORS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> as having greater potential for an upside surprise in profits and valuation than CATERPILLAR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAT)") else Response.Write("(NYSE: CAT)") end if %> over the next 6 to 12 months, slamming shares of the heavy equipment maker $3 7/16 to $56 3/8.

CONFERENCE CALLS

GLOBAL MOTORSPORT GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSTM)") else Response.Write("(Nasdaq: CSTM)") end if %> (800) 633-8284 (reservation #3111602) -- replay through 9/4 @ 5:30 pm EDT

ETEC SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ETEC)") else Response.Write("(Nasdaq: ETEC)") end if %>
(800) 633-8284 (code: 3030112) -- replay from 7:00 pm EDT through 9/4 @ 7:00 pm EDT

BECKMAN INSTRUMENTS, INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BEC)") else Response.Write("(NYSE:BEC)") end if %>
Re: acquisition of Coulter Corporation
(800) 633-8284 (password 3104980) -- replay through 9/4 @ 8:00 pm EDT

THIS WEEK'S CONFERENCE CALL SYNOPSES

APPLE/POWERCOMPUTING Call

FOOL PORTFOLIO                BORING PORTFOLIO

ATCT up $5/32 at $4 11/32     ATLS up $1/4 at $28 3/8
AOL up $2 at $70 3/4          BGP down $3/4 at $24 1/2
CHV down $1/16 at $80 1/8     CSL down $5/16 at $43 11/16
COMS up $9/16 at $49 1/4      CSCO down $1/16 at $77 3/4
DJT up $1/8 at $11 5/16       GNT down $1/16 at $45 15/16
GM up $15/16 at $66 3/16      ORCL up $9/16 at $39 1/16
INVX down $1 1/8 at $31 3/4   OXHP up $1 1/4 at $76 7/8
IOM up $15/16 at $28 11/16    PMSI up $1/4 at $13 1/2
KLAC down $3/16 at $71 1/2    TDW up $1/4 at $55 1/6
LU up $7/8 at $81 5/16
MMM up $3/16 at $92 9/16
T down $5/16 at $39 1/2

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