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B R E A K F A S T W I T H T H E F O O L Thursday, November 16, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=198634 _________________________________________________________________ Sponsored By: NDB Apply Now and get $75 in Free Trade Commissions when you open your account with National Discount Brokers / ndb.com. Another way we take you under our wing. http://www.lnksrv.com/m.asp?i=198635 "The scalded cat fears even cold water." -- Thomas Fuller MIXED NEWS FROM APPLIED MATERIALS The company reports a strong fourth quarter, but warns that next quarter's earnings will miss expectations. By Chris Rugaber Leading semiconductor equipment maker Applied Materials (Nasdaq: AMAT) reported strong fourth-quarter results after the closing bell yesterday, doubling profits on an 81% increase in sales. However, the company also warned that fiscal first-quarter earnings would miss current forecasts. Nevertheless, the company's fourth quarter (ended October 29) was solid, to say the least. Net income jumped to $663.8 million, or $0.77 per share, from $303.8 million, or $0.37 per share, in last year's fourth quarter. Analysts expected the company to earn $0.76 per share. Sales reached $2.92 billion, up from $1.61 billion, while new orders more than doubled to $3.6 billion and backlog increased to $4.38 billion, from $3.69 billion last year. Margins also improved, with gross margin increasing to 51.7%, up from 49.6% in the year-earlier period, and net margin rising to 22.7%, 3.9 points higher than the year-earlier figure. Despite the strong showing, the company is cautious about future results, which is not too surprising given the cyclical nature of the semiconductor industry. While Applied Materials benefited from capacity increases at many chipmakers earlier this year, concerns over slowing mobile phone and PC sales have muddied the waters regarding revenue and earnings for the second half of next year. "Conditions in our industry have become more complex and uncertain," Chief Financial Officer Joseph Bronson told Bloomberg News. "It is unclear what the impact of this uncertainty will be on our markets." For next quarter, the company stated that earnings per share (EPS) were likely to come in between $0.75 and $0.78, below current analysts' estimates of $0.80. Revenue should be between $2.9 billion and $2.95 billion, below previous expectations of $3.12 billion. Investors that have held on through Applied Materials' ups and downs have done pretty well over the years, though recent times have been tougher. For more information about the company, check out a Daily Double from Rick Munarriz this past spring. http://www.fool.com/m.asp?i=198636 http://www.fool.com/m.asp?i=198637 _________________________________________________________________ NEWS TO GO In a long-expected move, AT&T (NYSE: T) announced yesterday that it would spin off cable TV programming division Liberty Media (NYSE: LMG.A), which it received as part of its purchase of cable giant Tele-Communications, Inc. last year. While the decision is dependent on a favorable tax ruling, AT&T plans to convert the company's tracking stock to an asset-based equity and distribute shares to holders of the tracking stock in the second quarter of 2001. By selling Liberty, which owns stakes in the E! Entertainment Network and Courtroom Television Network, AT&T may satisfy regulatory conditions placed on it for the approval of its purchase of cable operator MediaOne Group. The mega-merger between America Online (NYSE: AOL) and Time Warner (NYSE: TWX) may be delayed past the two companies' self-imposed deadline of December 21, according to a report in today's Wall Street Journal. The Federal Trade Commission (FTC) wants the two companies to strike a cable-access deal with an Internet service provider (ISP) as a condition of the merger, and last week the FTC delayed a vote on the merger until November 30 to give the two companies time to strike a deal with an ISP. Nevertheless, the FTC would have to approve a cable-access deal before the merger vote, and may not be able to do so in time. The Journal also reported that the two companies disagreed on strategy, as Time Warner wanted last week's vote to proceed, while AOL did not. An AOL vice president denied that there were any disagreements. Retailer Nordstrom (NYSE: JWN) reported dismal third-quarter earnings after yesterday's market close. The company, under new management led by Nordstrom family members, saw profit from operations drop 41% to $23.4 million, or $0.18 per share, from $39.7 million, or $0.29 per share, in the year-earlier period. Sales rose 13%, to $1.25 billion, from $1.11 billion. The company used steep price markdowns to clear out summer and fall merchandise, and also saw an increase in operating expenses, with sales, general and administrative (SG&A) costs jumping to 34.8% of revenue from 31.7% a year earlier. The world's second-largest auction house, Sotheby's (NYSE: BID), reported a disappointing third quarter and warned that fourth-quarter and fiscal 2000 earnings would be below last year's. Third-quarter sales dropped 6%, from $45.3 million last year to $42.6 million, and losses from operations increased to $0.45 per share, from $0.41. In addition, the company took a pre-tax charge of $184.8 million, or $2.68 per share, as a result of its settlement of shareholder lawsuits and an antitrust investigation by the U.S. Department of Justice. The company pleaded guilty last month to conspiring with its rival Christie's on auction commission fees. Check out yesterday's Foolish wrap-up with just one click. http://www.fool.com/m.asp?i=198638 _________________________________________________________________ EDITORS' PICK Does Intel have a future as king of all market niches it touches? Two Fools debate the issue. http://www.fool.com/m.asp?i=198639 _______________________________________________________________ -News & Commentary http://www.fool.com/m.asp?i=198640 -Fool Community http://www.fool.com/m.asp?i=198641 -Post of the Day http://www.fool.com/m.asp?i=198642 -Latest Fribble http://www.fool.com/m.asp?i=198643 -Latest Market Numbers http://www.fool.com/m.asp?i=198644 ____________________________________________________________ My Portfolio: http://www.fool.com/m.asp?i=198645 My Discussion Boards: http://www.fool.com/m.asp?i=198646 My Fool: http://www.fool.com/m.asp?i=198647 Fool.com Home: http://www.fool.com/m.asp?i=198648 My E-Mail Settings: http://www.fool.com/m.asp?i=198649 Sponsored By: NDB Apply Now and get $75 in Free Trade Commissions when you open your account with National Discount Brokers / ndb.com. Another way we take you under our wing. http://www.lnksrv.com/m.asp?i=198650 FREE BOOK, JUST FOR FOOLS! Investor's Business Daily will send you a free copy of 24 Essential Lessons for Investment Success when you sign up for a free trial subscription of their newspaper. http://www.lnksrv.com/m.asp?i=198651 INVESTMENT OPPORTUNITIES IN STEM CELLS Get a free preview of this new report at Soapbox.com. http://www.lnksrv.com/m.asp?i=198652 FOOL DIRECT E-MAIL SERVICES Need to change your address or unsubscribe? You can also temporarily suspend mail delivery. Click here: http://www.fool.com/community/freemail/freemaillogin.asp?email=benjamin.rogers @enron.com< Have ideas about how we can improve the Fool Direct or new e-mail products you'd like to see? Try our discussion board: http://www.fool.com/m.asp?i=198653 ____________________________________________________ © Copyright 2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-14936-2000-11-16_9-10-01-3300192_2_Plain_MessageAddress.msg-09:15:12(11-16 -2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com
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