<BREAKFAST WITH THE FOOL>
Wednesday, January 6, 1999
"There are two things to aim at in life: first, to get what you want; and after that, to enjoy it. Only the wisest of mankind achieve the second." -- Logan Pearsall Smith
Mac Is Back
Thanks to iMac, the Mac is back.
Next week, Apple Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %> expects to report a profit for the fifth straight quarter amid strong sales of the new, cute, translucent "plug and play" computer. Apple has sold some 800,000 iMacs -- or roughly one every 15 seconds -- since the product shipped August 15, 1998, making it the company's hottest-selling computer ever. According to independent firm Audits & Surveys Worldwide, about 32% of iMacs sold between October and early December were purchased by first-time computer buyers, while 13% were bought by Wintel converts.
To keep the momentum going, Apple took $100 off iMac's selling price to bring it to $1,199 and launched five new fruity colors -- strawberry, blueberry, lime, tangerine, and grape -- in place of the original blue hue model, now on sale for $1,049. "For most consumers, color is much more important than the megahertz, gigabytes and other gibberish associated with buying a typical PC," noted Apple's interim CEO Steve Jobs. "'What's your favorite color?' is going to become one of the most important questions for consumer PC buyers." The new and improved iMac also comes with a faster 266 MHz PowerPC G3 processor and a 6GB hard drive.
In addition, Apple introduced a new line of Power Macintosh G3 computers, priced as low as $1,599, at the Macworld Expo being held in San Francisco. The new G3s, the most powerful computers in the company's history, come with the latest copper-based PowerPC processors running up to 400MHz, ATI RAGE 128 graphics, FireWire, USB and 10/100BASE-T Ethernet -- plus a nifty door allowing easy access for further upgrading the computer's hardware.
Apple also unveiled its new server operating system, Mac OS X Server, and said that more than 1,300 new third-party software titles have hit the market since iMac was first revealed last May. At the Expo, Microsoft <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> announced two product upgrades, Internet Explorer 4.5 for Mac and Outlook Express 4.5, plus a new website dedicated to Mac users.
News to Go
The world's second largest automaker Ford Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> is reportedly in talks to buy Japan's Honda Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HMC)") else Response.Write("(NYSE: HMC)") end if %> and Germany's Bayerische Motoren Werke AG, better known simply as BMW, according to news agency Agence France Presse. Honda and BMW denied the report, and Ford declined comment.
Long distance phone giant AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> may take public 10% of a new tracking stock it plans to create in connection with its acquisition of cable TV company Tele-Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %>, The Wall Street Journal reported. Analysts estimate that the assets represented by the new tracking stock would be valued in excess of $29 billion, excluding debt.
High-end shoes and accessories maker Gucci Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GUC)") else Response.Write("(NYSE: GUC)") end if %> shares surged in European trading after French luxury goods giant LVMH Moet Hennessy Louis Vuitton SA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LVMHY)") else Response.Write("(Nasdaq: LVMHY)") end if %> announced it now owns a more than 5% stake in the Italian fashion house, prompting speculation about a possible takeover.
Earnings Warnings:
Aspect Telecommunications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASPT)") else Response.Write("(Nasdaq: ASPT)") end if %> expects fourth quarter earnings of $0.10 to $0.14 a share, short of the First Call analysts' mean estimate of $0.21.
Cannondale Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BIKE)") else Response.Write("(Nasdaq: BIKE)") end if %> anticipates fiscal Q2 EPS of around $0.20, compared with the $0.36 expected by analysts.
Hyperion Solutions <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HYSL)") else Response.Write("(Nasdaq: HYSL)") end if %> expects fiscal Q2 EPS of $0.25 to $0.30 versus analysts' expectations of $0.31. The company said Q3 EPS will also fall short of estimates.
Information Management Associates <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMAA)") else Response.Write("(Nasdaq: IMAA)") end if %> is forecasting a Q4 loss due to delayed purchases by several customers. Analysts were expecting the company to earn $0.16 a share.
JDA Software Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JDAS)") else Response.Write("(Nasdaq: JDAS)") end if %> expects a Q4 loss of $0.08 to $0.11 a share, compared with expectations of a profit of $0.16.
Tenneco Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TEN)") else Response.Write("(NYSE: TEN)") end if %> anticipates its Q4 earnings will be "substantially below" consensus estimates due to weak performance in its automotive aftermarket business. Excluding charges, the earnings shortfall could be as much as $40 million.
More Foolishness
A look back at 1998: Tom Gardner reflects on the year's highlights in Fooldom... The Rule Breaker Portfolio (formerly called the Fool Portfolio) stomped the S&P 500 and 100% of all mutual funds... 1998 winners and losers, Internet mania, and a timeline of the year's most newsworthy events... Plus Foolish resolutions for the new year.
-- Tuesday's Evening News
-- Fool Community