<BREAKFAST WITH THE FOOL>
Thursday, October 29, 1998
"Bismarck said that even fools profit from their own experience; let us instead try to profit from the experience of others." -- John Train
Amazon Swimming Along
Online book and music retailer Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> reported its Q3 results after the bell last night, posting a pro forma operating loss of $0.49 per share (excluding acquisition-related charges). The loss was more than double last year's $0.21 per share loss, as the company's marketing expenses more than tripled to $37.5 million compared to a year ago. However, the results were not quite as bad as the $0.57 per share loss called for by First Call.
Net sales rose more than 305% to $153.7 million from the same period a year ago. Amazon said it recorded $14.4 million in music sales during the quarter, making it the "#1 online music retailer." Investors will likely be keeping a close eye on Amazon's music retailing push, which formally began in June. Rival music sellers CDnow <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDNW)") else Response.Write("(Nasdaq: CDNW)") end if %> and N2K <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTKI)") else Response.Write("(Nasdaq: NTKI)") end if %> agreed to merge last week in part to compete more effectively against Amazon and lure away some of its music customers.
In a conference call with a whopping three reporters, the company reportedly said it is on track to see profitability from its book business in the future. However, building the business is more important to the firm right now than generating profits. "We believe this is a critical category formation time, and we're investing in our business in a way that is commensurate with that time," CEO Jeff Bezos reportedly told the anointed ones, which apparently included Reuters. But no news organizations were privy to the firm's other call, which was just for analysts. This had the effect of sticking Amazon's shareholders with another instance of selective news dissemination.
News to Go
Radio and TV network operator CBS Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %> reported breakeven Q3 operating EPS this morning, which excluded a $68 million charge to "streamline" its TV unit. The results topped the $0.02 per share operating loss reported a year ago and the $0.01 per share loss expected by analysts surveyed by First Call. Additionally, CBS said Chairman and CEO Michael Jordan will retire by the end of the year. Jordan will be replaced by current president and COO Mel Karmazin.
Casual clothing retailer Gap Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %> announced it will split its stock three-for-two. The company also said it will buy back up to 30 million outstanding shares, replacing a recently completed 45 million share repurchase plan.
Catalog retailer Lands' End <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LE)") else Response.Write("(NYSE: LE)") end if %> said its president and CEO and its vice chairman of sales have both resigned. The company said former Home Shopping Network president and COO David Dyer will assume the president and CEO positions.
Minute Maid, a subsidiary of Coca-Cola Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %>, said it will raise the price of its orange juices "in the near future" as the company prepares to deal with lower-than-expected orange crops in Florida and Brazil. Yesterday, PepsiCo <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PEP)") else Response.Write("(NYSE: PEP)") end if %> unit Tropicana Products said it would raise the wholesale price of its orange juices by an average of 10% sometime next month.
Rocky Mount, N.C.-based bank holding company Centura Banks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBC)") else Response.Write("(NYSE: CBC)") end if %> agreed to acquire First Coastal Bankshares <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FCBK)") else Response.Write("(Nasdaq: FCBK)") end if %> in a stock swap valued at $117 million, or $23.50 per share. The purchase price represents a 21% premium to First Coastal's closing price of $19.50 per share yesterday.
Earnings Announcements:
ACT Manufacturing <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACTM)") else Response.Write("(Nasdaq: ACTM)") end if %> -- Q3 EPS: $0.09 vs. $0.07 loss last year; Estimate: $0.09
Chiron Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHIR)") else Response.Write("(Nasdaq: CHIR)") end if %> -- Q3 EPS: $0.19 (including charge) vs. $0.11 loss last year; Estimate: $0.14
DTE Energy Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DTE)") else Response.Write("(NYSE: DTE)") end if %> -- Q3 EPS: $0.91 vs. $0.91 last year; Estimate: $0.89
Elsag Baily Process Automation <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EBY)") else Response.Write("(NYSE: EBY)") end if %> -- Q3 EPS: $0.25 vs. $0.17 last year (excluding charges); Estimate: $0.24
Excel Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ECI)") else Response.Write("(NYSE: ECI)") end if %> -- Q3 EPS: $0.27 vs. $0.31 last year; Estimate: $0.28
Gilead Sciences Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GILD)") else Response.Write("(Nasdaq: GILD)") end if %> -- Q3 EPS: $0.58 loss vs. $0.35 loss last year; Estimate: $0.65 loss
Ingram Micro <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IM)") else Response.Write("(NYSE: IM)") end if %> -- Q3 EPS: $0.40 vs. $0.31 last year; Estimate: $0.39
McLeodUSA Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCLD)") else Response.Write("(Nasdaq: MCLD)") end if %> -- Q3 EPS: $0.52 loss vs. $0.45 loss last year; Estimate: $0.60 loss
MCN Energy Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCN)") else Response.Write("(NYSE: MCN)") end if %> -- Q3 EPS: $0.10 loss (excluding charges) vs. $0.02 gain last year; Estimate: $0.12 loss
Perkin-Elmer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PKN)") else Response.Write("(NYSE: PKN)") end if %> -- fiscal Q1 EPS: $0.35 (before charges) vs. $0.43 last year; Estimate: $0.32
Pharmacia & Upjohn <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PNU)") else Response.Write("(NYSE: PNU)") end if %> -- Q3 EPS: $0.41 vs. $0.35 last year; Estimate: $0.41
Reader's Digest Association <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RDA)") else Response.Write("(NYSE: RDA)") end if %> -- fiscal Q1 EPS: $0.02 vs. $0.05 loss last year; Estimate: $0.01 loss
Republic Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RII)") else Response.Write("(NYSE: RII)") end if %> -- Q3 EPS: $0.38 vs. $0.28 last year; Estimate: $0.38
Speiker Properties <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SPK)") else Response.Write("(NYSE: SPK)") end if %> -- Q3 FFO: $0.75 vs. $0.66 last year; Estimate: $0.75
Uniphase Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UNPH)") else Response.Write("(Nasdaq: UNPH)") end if %> -- fiscal Q1 EPS: $0.24 vs. $0.17 last year; Estimate: $0.24
Varco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VRC)") else Response.Write("(NYSE: VRC)") end if %> -- Q3 EPS: $0.23 vs. $0.21 last year; Estimate: $0.23
WellPoint Health Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLP)") else Response.Write("(NYSE: WLP)") end if %> -- Q3 EPS: $0.95 (excluding tax benefit) vs. $0.79 last year; Estimate: $0.95
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Brian Graney (TMF Panic), Writer
Jennifer Silber (TMF Amused), Editor
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