<BREAKFAST WITH THE FOOL>
Thursday, January 28, 1999
"If you take risks, you may still fail. But if you do not take risks, you will surely fail. The greatest risk of all is to do nothing." -- Robert Goizueta
Ford to Buy Volvo Cars
The world's second largest automaker Ford Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> this morning announced it will acquire AB Volvo's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VOLVY)") else Response.Write("(Nasdaq: VOLVY)") end if %> worldwide car business for 50 billion kronor, or $6.45 billion, in cash. Ford, which outmaneuvered other potential suitors such as Italy's Fiat SpA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FIA)") else Response.Write("(NYSE: FIA)") end if %>, anticipates the deal will result in higher annual earnings due to an "expanded product lineup, volume growth, global economies of scale in engineering resources and purchasing, and platform and manufacturing synergies."
Volvo will continue to be run out of Gothenburg, Sweden, by the same management. Ford will take over three major Volvo assembly plants and two powertrain plants in Europe, as well as Volvo's passenger vehicle product development center in Gothenburg. The deal gives Ford permanent rights to use the Volvo brand for cars, minivans, sport utility vehicles, and light trucks, leaving Volvo with use of the brand for commercial vehicles and its non-automotive-related products. Ford's stable of brands already includes Aston Martin, Jaguar, Lincoln, Mazda and Mercury.
The announcement puts to rest months of speculation regarding a possible deal involving Ford and Volvo since the company then known as Daimler-Benz announced plans to buy the No. 3 U.S. automaker, Chrysler, last May. While this deal seems puny next to the $37 billion DaimlerChrysler <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DCX)") else Response.Write("(NYSE: DCX)") end if %> merger, Ford's purchase of Europe's seventh largest automaker adds 400,000 cars to its annual production of 6.5 million cars and light trucks and increases its European market share a tad to 11.9% from 10.2%. That puts it behind Volkswagen AG but ahead of General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %>, which owns 50% of Volvo's Swedish rival Saab AB.
News to Go
Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> said it will acquire online community GeoCities <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GCTY)") else Response.Write("(Nasdaq: GCTY)") end if %> in an all-stock deal valued at about $3.56 billion, or $113.66 a share, a 52% premium to GeoCities' closing price yesterday of $75. The deal will strengthen Yahoo!'s position online as rival America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> completes its acquisition of Netscape Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> and Excite <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> becomes a part of high-speed Internet access provider @Home <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ATHM)") else Response.Write("(Nasdaq: ATHM)") end if %>. Check out the Fool's StockTalk interview earlier this month with GeoCities President and CEO Tom Evans.
America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> late yesterday reported fiscal second quarter earnings of $0.17 a share, up from $0.04 last year and beating analysts' mean estimate of $0.14. The online services provider also said it will split its stock 2-for-1 effective February 22.
Earnings, Earnings, Earnings:
Allegheny Teledyne <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALT)") else Response.Write("(NYSE: ALT)") end if %> -- Q4 EPS: $0.39 (before one-time items) vs. $0.42 last year; estimate: $0.35
BroadVision <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BVSN)") else Response.Write("(Nasdaq: BVSN)") end if %> -- Q4 EPS: profit of $0.08 vs. loss of $0.05 last year; estimate: profit of $0.08
Centocor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNTO)") else Response.Write("(Nasdaq: CNTO)") end if %> -- Q4 EPS: $0.14 (before charges) vs. $0.04 last year; estimate: $0.12
Dendrite International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DRTE)") else Response.Write("(Nasdaq: DRTE)") end if %> -- Q4 EPS: $0.18 vs. $0.11 last year; estimate: $0.15
Dura Pharmaceuticals <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DURA)") else Response.Write("(Nasdaq: DURA)") end if %> -- Q4 EPS: $0.07 (before charges) vs. $0.37 last year; estimate: $0.07
Eli Lilly & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LLY)") else Response.Write("(NYSE: LLY)") end if %> -- Q4 EPS: $0.51 vs. $0.40 last year; estimate: $0.51
ESS Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ESST)") else Response.Write("(Nasdaq: ESST)") end if %> -- Q4 EPS: profit of $0.11 vs. loss of $0.30 last year; estimate: profit of $0.09 (one analyst)
Exodus Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EXDS)") else Response.Write("(Nasdaq: EXDS)") end if %> -- Q4 EPS: loss of $1.00 (before charges) vs. (net) loss of $5.91 last year; estimate: loss of $1.00
GeoCities <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GCTY)") else Response.Write("(Nasdaq: GCTY)") end if %> -- Q4 EPS: loss of $0.27 vs. loss of $0.14 last year; estimate: loss of $0.34
Gilead Sciences <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GILD)") else Response.Write("(Nasdaq: GILD)") end if %> -- Q4 EPS: loss of $0.53 vs. loss of $0.42 last year; estimate: loss of $0.59
Greg Manning Auctions <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GMAI)") else Response.Write("(Nasdaq: GMAI)") end if %> -- Q4 EPS: profit of $0.04 vs. loss of $0.14 last year
Informix Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IFMX)") else Response.Write("(Nasdaq: IFMX)") end if %> -- Q4 EPS: $0.14 (before charges) vs. $0.05 last year; estimate: $0.11
Inprise Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INPR)") else Response.Write("(Nasdaq: INPR)") end if %> -- Q4 EPS: $0.06 vs. $0.01 last year; estimate: $0.04
Kerr-McGee <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KMG)") else Response.Write("(NYSE: KMG)") end if %> -- Q4 EPS: $0.09 (before charges) vs. $0.73 last year; estimate: loss of $0.03
Macromedia <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MACR)") else Response.Write("(Nasdaq: MACR)") end if %> -- fiscal Q3 EPS: profit of $0.12 vs. loss of $0.19 last year; estimate: $0.10
M.A. Hanna Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MAH)") else Response.Write("(NYSE: MAH)") end if %> -- Q4 EPS: $0.05 vs. $0.34 last year; estimate: $0.13
Mindspring Enterprises <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSPG)") else Response.Write("(Nasdaq: MSPG)") end if %> -- Q4 EPS: $0.07 (before tax benefit) vs. $0.02 last year; estimate: $0.07
PairGain Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAIR)") else Response.Write("(Nasdaq: PAIR)") end if %> -- Q4 EPS: $0.07 (before valuation adjustment) vs. $0.17 last year; estimate: $0.08
Ticketmaster Online-CitySearch <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TMCS)") else Response.Write("(Nasdaq: TMCS)") end if %> -- Q4 EPS: loss of $0.26 vs. loss of $0.35 last year; estimate: loss of $0.31
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor