<BREAKFAST WITH THE FOOL>
Thursday, October 8, 1998
"The rare company which is able to retain its share of the market year after year and decade after decade does so by means of productive efficiency -- and deserves praise, not condemnation." -- Alan Greenspan
Woo-hoo! for Yahoo!
Woo-hoo! (You know, the way Homer Simpson would say it.) Internet portal company Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> gave investors something to yahoo about by reporting after yesterday's close third quarter earnings of $0.15 per share, a significant improvement over the $0.01 it earned in the same year-earlier period. Yahoo! also topped analysts' mean estimate of $0.09 a share, though that was hardly surprising given that the company has often exceeded official expectations. The real news is that it beat so-called "whisper" numbers -- the estimates talked about among the Wise but not broadly disclosed to the masses -- of as high as $0.12 a share.
The Santa Clara, Calif.-based firm also reported that revenues for the quarter almost tripled from a year ago to $53.6 million and jumped 30% from the preceding quarter. Traffic on the company's websites also rose 25% to an average of 144 million page views per day in September from an average of 115 million a day in June, matching the high end of analysts' estimates. Meanwhile, its number of registered users has ballooned in excess of a whopping 25 million.
In addition, the company added 150 advertisers and merchants this quarter for a total of 1,950, according to Bloomberg. Yahoo!'s operating margin reached 31.7%, according to analysts quoted by Bloomberg, already meeting the company's forecast last month that it would achieve a margin of 30% to 36% within a year.
News to Go
Aerospace giant Raytheon Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RTN.B)") else Response.Write("(NYSE: RTN.B)") end if %> warned that due to a slowdown in its engineering and construction segment it expects third quarter earnings to come in "slightly below" analysts' current mean estimate of $0.90 a share, but it anticipates meeting expectations of $1.08 for the fourth quarter. Its Raytheon Systems Co. plans to cut 16% of its workforce -- 12% by year-end and 4% next year -- for a total of 14,000 jobs over two years. The company had earlier targeted a 10% reduction. It also plans to close or downsize more facilities than were previously announced and take a one-time Q3 charge of $284 million, or $0.83 a share.
The Wall Street Journal quoted analysts as saying that Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> has maintained its roughly 73% share of the domestic film market in recent months. This along with aggressive cost-cutting measures has prompted several analysts to upwardly revise earnings forecasts.
The nation's largest computer retailer CompUSA Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %> reported that comparable store sales for its fiscal first quarter ended September 26 fell 1.7% due to lower average selling prices, continued softness of sales to companies, and the impact of liquidation sales related to the closing of Computer City stores.
After plummeting $18 to $67 yesterday, credit card company Capital One Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COF)") else Response.Write("(NYSE: COF)") end if %> reaffirmed its 1998 earnings expectation of $3.90 a share. That represents a 40% increase on a per-share basis over 1997.
According to a recent study, a new product designed by medical devices maker Medtronic Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %> to treat aortic aneurysms in the abdominal area has shown results that compare "favorably'" to more invasive procedures used to treat the condition.
Earnings Announcements Today:
Costco <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COST)") else Response.Write("(Nasdaq: COST)") end if %> -- Q4 mean EPS estimate: $0.65; last year: $0.56
Dow Jones <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DJ)") else Response.Write("(NYSE: DJ)") end if %> -- Q3 mean EPS estimate: $0.39; last year: $0.28
Abbott Labs <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABT)") else Response.Write("(NYSE: ABT)") end if %> -- Q3 mean EPS estimate: $0.34; last year: $0.30
Dallas Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DS)") else Response.Write("(NYSE: DS)") end if %> -- Q3 mean EPS estimate: $0.47; last year: $0.57
Diamond Multimedia <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DIMD)") else Response.Write("(Nasdaq: DIMD)") end if %> -- Q3 mean EPS estimate: loss of $0.16; last year: loss of $0.07
PairGain Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAIR)") else Response.Write("(Nasdaq: PAIR)") end if %> -- Q3 mean EPS estimate: $0.16; last year: $0.16
More Foolishness
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor
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