<BREAKFAST WITH THE FOOL>
Monday, November 9, 1998
"Only fools get swelled up over money." -- John D. Rockefeller, Sr.
Motorola Snubbed Again
As the old adage goes, "What is one person's loss is another person's gain." Late Friday, wireless communications services provider AirTouch Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ATI)") else Response.Write("(NYSE: ATI)") end if %> said it signed a multi-year agreement to buy network switches, base stations, and controllers from Nortel Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NT)") else Response.Write("(NYSE: NT)") end if %> for its network expansion in Southern California. The agreement is a hit to Motorola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %>, which had previously been the sole supplier of equipment for AirTouch's network in the Los Angeles area.
However, AirTouch said the deal was awarded to Nortel rather than Motorola solely on the basis of price. "We have a solid relationship with Motorola and will continue to rely on their products to support other cellular networks as well as our paging and handset needs," an AirTouch official said. The company added that the agreement will provide "a better balance" among AirTouch's suppliers. The firm said 40% of its infrastructure needs will still be supplied by Motorola, with another 40% provided by Nortel and the remaining 20% supplied by Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> and Ericsson <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ERICY)") else Response.Write("(Nasdaq: ERICY)") end if %>.
This is the second time in less than a month that Motorola has lost an AirTouch related contract. On Oct. 20, AirTouch's PrimeCo Personal Communications joint venture with Bell Atlantic <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEL)") else Response.Write("(NYSE: BEL)") end if %> said it had started replacing its existing Motorola equipment with $500 million of new products from Lucent. Analysts had been hoping the firm's cellular infrastructure unit was going to take part in the company's long-awaited turnaround, which showed early signs of life in Motorola's Q3 earnings report last month. During that period, Motorola said infrastructure sales "increased significantly" thanks to a pickup in equipment orders.
News to Go
Number one automaker General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> has reportedly signed a 10-year, multi-billion dollar agreement with aluminum producer Alcan Aluminum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AL)") else Response.Write("(NYSE: AL)") end if %> to purchase aluminum for its vehicles. The deal, which was first reported in The Wall Street Journal, is consistent with plans by several major international automakers to replace more steel components in cars with lighter-weight aluminum parts.
Utility holding company GPU Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPU)") else Response.Write("(NYSE: GPU)") end if %> agreed to sell 23 power plants, 18 development properties, three support units, and a Pennsylvania office building to power plant operator Sithe Energies for $1.68 billion. Sithe, which is partially owned by France's Vivendi and Japan's Marubeni Corp., has agreed to give GPU an option to purchase power from the plants at a fixed cost into 2002.
Broadband cable TV and wireless network operator Comcast Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMCSA)") else Response.Write("(Nasdaq: CMCSA)") end if %> reported a Q3 loss of $0.01 per share (excluding one-time gains), beating the Street's mean estimate of a loss of $0.25 per share. The company said consolidated operating cash flow rose 12.5% in the quarter to $1.355 billion.
Investment bank J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JPM)") else Response.Write("(NYSE: JPM)") end if %> will reportedly cut 740 positions, or about 5% of its staff, by the end of the year as the bank tries to cut costs following losses associated with the recent turmoil in international financial markets, according to The Wall Street Journal.
Assisted living services provider ARV Assisted Living <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SRS)") else Response.Write("(AMEX: SRS)") end if %> announced that CFO Victor Streuffert will resign due to "personal reasons." Streuffert had served as the company's CFO for only two weeks.
More Foolishness
Warren Gump offers some suggestions for profiting from industry turmoil in The Fool on the Hill... New manager Alex Schay takes a look at Bore Port holding Andrew Corp. in the Boring Port report... Did you miss this weekend's Motley Fool Radio Show? Read about what David and Tom were talking about... Are you new to the Fool? Learn how to put your money to work for you with the Motley Fool's 13 Steps.
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor
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