<BREAKFAST WITH THE FOOL>

Thursday, December 24, 1998

"From a commercial point of view, if Christmas did not exist it would be necessary to invent it." -- Katharine Whitehorn

MERRY CHRISTMAS,
BREAKFAST FOOLS!

Latest Market Numbers

Toys Are Us

In the spirit of the holidays, we interrupt the regularly scheduled program for a special report on toys. After all, what would Christmas be without toys?

Well, Toymax International (Nasdaq: TMAX) late yesterday warned that its fiscal third quarter earnings will fall short of analysts' expectations due to "restricted buying patterns at our customers." In plain-speak, this means that toy retailers aren't reordering as many toys as the toy maker had anticipated. In a telling statement that doesn't speak well of the toy market, the company said, "Given the current state of the industry, we are very pleased to have increases over last year." Toymax makes such toys as Creepy Crawlers, the Arcadia Electronic Skeet Shoot game system, R.A.D. Robot, and Mighty Mo's vehicles.

Meanwhile, toy maker Hasbro (NYSE: HAS) has reportedly paid Time Warner Inc.'s (NYSE: TWX) Warner Brothers studio an "undisclosed seven-figure sum" to settle a lawsuit over the uncanny resemblance between its hot, interactive Furby toy and Gizmo, the star of the movie studio's 1984 hit Gremlins, according to the Daily Variety. Also, Hasbro's Tiger Electronics reportedly will redesign the popular animated "pet." But a Warner Brothers spokeswoman told the Associated Press that the report was unwarranted and that there's no pending litigation against Hasbro. If Furbys are to be redesigned, that would further increase the value of the little critters, which have sold for $130 in Internet auctions -- the suggested retail price: $30.

Speaking of toys, don't miss a war of words over toy retailing giant Toys "R" Us (NYSE: TOY) in this week's Dueling Fools. We now return to the regularly scheduled program already in progress.

News to Go

Computer chip maker Micron Technology (Nasdaq: MU) reported a fiscal first quarter loss of $0.19 a share, compared with a profit of $0.03 in the same year-earlier period and a loss of $0.43 in the preceding quarter. The Q1 loss was better than analysts' mean estimate of a loss of $0.28 a share. Micron said results are improving due to improved pricing for its semiconductor memory products.

The Federal Reserve formally shifted its policy position to neutral -- to lean neither toward higher nor lower interest rates -- at its November meeting on expectation that it won't need to further cut interest rates any time soon, according to The Wall Street Journal's Fed guru David Wessel. The Fed left interest rates unchanged when it met Tuesday and isn't scheduled to reconvene until early February.

Ford Motor Co. (NYSE: F) unloaded its entire 9.4% interest in Kia Motors Corp., the bankrupt South Korean car maker that was taken over by rival Hyundai Motor Co. earlier this month, on J.P. Morgan (NYSE: JPM), which bought the stake for roughly $11 million. Ford, which had paid $250 million for that stake, still owns a part of Kia through its Japanese affiliate Mazda Motor Co., which holds a 7.5% interest.

Independent energy exploration and development company Rutherford-Moran Oil Corp. (Nasdaq: RMOC) agreed to be acquired by Chevron (NYSE: CHV) for around $91 million, or $3.50 a share, in stock, and assumption of debt totaling more than $302 million. See our piece on Rutherford-Moran in our Year in Review collection.

Believe it or not, the partnership that runs Long-Term Capital Management LP may collect up to $50 million in year-end "performance fees" just three months after the hedge fund had to be bailed out of bankruptcy by 14 banks and brokerage firms, The Wall Street Journal reported. As of the end of November, the bailout consortium had made $400 million from the $3.625 billion it invested.

More Foolishness

Eight days left until the end of the Fool's second annual charity drive to help fight hunger. See why Fools are giving to Share Our Strength (SOS) and why we hope you will, too. Also, check out our latest update.

-- Wednesday's Evening News
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Yi-Hsin Chang (TMF Puck), Writer
Brian Bauer(TMF Hoops), Editor

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