<BREAKFAST WITH THE FOOL>
Tuesday, October 20, 1998
"I know of nothing more despicable and pathetic than a man who devotes all the hours of the waking day to the making of money for money's sake." -- John D. Rockefeller
Creative Accounting
Small household appliance maker Sunbeam Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SOC)") else Response.Write("(NYSE: SOC)") end if %> restated its financial results this morning, cutting 1997 earnings by more than half to $0.60 from $1.41 a share and increasing its loss in the first quarter of 1998 to $0.53 from $0.45 a share. Sunbeam shares jumped $1 5/8, or 33%, yesterday to $6 1/2 on optimism that the earnings restatement will help remove the company from under a dark cloud of controversy.
Thanks to creative accounting methods that lumped operating expenses into a 1996 restructuring charge of $188.3 million, booked revenues too early, and capitalized operating expenses, the maker of cooking appliances and health and personal care equipment had been touting a turnaround during the tenure of turnaround artist and former Chairman and CEO Al Dunlap. When Dunlap was ousted this summer, he said he knew nothing about accounting irregularities at the company.
Sunbeam has postponed reporting 1998 second quarter earnings as a result of the audit but is expected to report Q2 and Q3 results soon. According to The Wall Street Journal, the company is expected to take "significant charges in those periods to write down excess inventory and other nonrecurring items."
News to Go
Latest Earnings Announcements:
AMC Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: AEN)") else Response.Write("(AMEX: AEN)") end if %> fiscal Q2 EPS: $0.34 vs. $0.33 (before charges) last year; Estimate: $0.27
Arkansas Best Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ABFS)") else Response.Write("(Nasdaq: ABFS)") end if %> Q3 EPS: $0.34 vs. $0.24 (before one-time items); Estimate: $0.30
Ascend Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %> Q3 EPS: $0.32 vs. $0.20 last year; Estimate: $0.31
Ballard Medical Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BMP)") else Response.Write("(NYSE: BMP)") end if %> fiscal Q4 EPS: $0.30 vs. $0.28 last year; Estimate: $0.30
Ben & Jerry's Homemade <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BJICA)") else Response.Write("(Nasdaq: BJICA)") end if %> Q3 EPS: $0.39 vs. $0.34 last year; Estimate: $0.33
Compuware Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CPWR)") else Response.Write("(Nasdaq: CPWR)") end if %> fiscal Q2 EPS: $0.36 (before charges) vs. $0.18; last year; Estimate: $0.32
Grand Casinos <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GND)") else Response.Write("(NYSE: GND)") end if %> Q3 EPS: $0.76 vs. $0.51 last year; Estimate: $0.54
Innotrac Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INOC)") else Response.Write("(Nasdaq: INOC)") end if %> Q3 EPS: $0.24 vs. $0.13 last year; Estimate: $0.22
JDA Software Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JDAS)") else Response.Write("(Nasdaq: JDAS)") end if %> Q3 EPS: $0.17 vs. $0.16 last year; Estimate: $0.22
National-Oilwell Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NOI)") else Response.Write("(NYSE: NOI)") end if %> Q3 EPS: $0.40 vs. $0.17 last year; Estimate: $0.41
Network Associates <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETA)") else Response.Write("(Nasdaq: NETA)") end if %> Q3 EPS: $0.41 (before charges) vs. $0.27 last year; Estimate: $0.38
Praxair Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PX)") else Response.Write("(NYSE: PX)") end if %> Q3 EPS: $0.66 vs. $0.65 last year; Estimate: $0.65
Qwest Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QWST)") else Response.Write("(Nasdaq: QWST)") end if %> Q3 EPS: loss of $0.02 vs. profit of $0.06 last year; Estimate: loss of $0.06
Raytheon Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RTN.A and RTN.B)") else Response.Write("(NYSE: RTN.A and RTN.B)") end if %> Q3 EPS: $0.86 vs. $0.88 last year; Estimate: $0.94
Schering-Plough Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGP)") else Response.Write("(NYSE: SGP)") end if %> Q3 EPS: $0.58 vs. $0.48 last year; Estimate: $0.57
Texas Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %> Q3 EPS: $0.41 vs. $0.60 last year; Estimate: $0.28
Tupperware Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TUP)") else Response.Write("(NYSE: TUP)") end if %> Q3 EPS: loss of $0.11 vs. profit of $0.06 last year; Estimate: loss of $0.12
United Video Satellite Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UVSGA)") else Response.Write("(Nasdaq: UVSGA)") end if %> Q3 EPS: $0.20 vs. $0.16 last year; Estimate: $0.22
Western Digital Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WDC)") else Response.Write("(NYSE: WDC)") end if %> fiscal Q1 EPS: loss of $1.24 (before charges) vs. $0.67 last year; Estimate: loss of $1.24
Xircom Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XIRC)") else Response.Write("(Nasdaq: XIRC)") end if %> fiscal Q4 EPS: $0.33 vs. loss of $0.57 last year; Estimate: $0.25
Earnings Announcements Today:
Chase Manhattan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMB)") else Response.Write("(NYSE: CMB)") end if %> -- Q3 estimate: $0.77; last year: $1.13
Duke Energy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DUK)") else Response.Write("(NYSE: DUK)") end if %> -- Q3 estimate: $1.10; last year: $0.94
EMC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %> -- Q3 estimate: $0.36; last year: $0.25
Kroger <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KR)") else Response.Write("(NYSE: KR)") end if %> -- Q3 estimate: $0.44; last year: $0.37
Microsoft <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> -- fiscal Q1 estimate: $0.49; last year: $0.36
Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> -- Q3 estimate: $0.83; last year: $0.76
Sprint <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FON)") else Response.Write("(NYSE: FON)") end if %> -- Q3 estimate: $0.45; last year: $0.49
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor
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