<BREAKFAST WITH THE FOOL>

Monday, January 25, 1999

"When I've heard all I need to make a decision, I don't take a vote. I make a decision." -- Ronald Reagan

Latest Market Numbers

AMD Gaining on Intel

Watch out, Intel (Nasdaq: INTC). Here comes AMD.

Intel lost market share in the microprocessor market in the fourth quarter to rival Advanced Micro Devices (NYSE: AMD), according to preliminary numbers released by market research firm International Data Corp. Intel's market share fell to 75.7% from 78.7% in the preceding quarter and 87.1% the year before, while AMD's increased to 15.5% from 12.7% in the third quarter and from 6.6% a year earlier as sales of its low-priced chips grew with the demand for under-$1,000 personal computers. Half of PCs costing less than $1,000 run on AMD microprocessors.

Intel missed the boat by not introducing its low-end Celeron chip until last April and not coming out with faster versions until later in the year. It slashed prices in early January and vowed to win back market share in the under-$1,000 PC market. Still, Intel held on to the bulk of revenue dollars -- 92% -- in last year's $22.4 billion chip market. AMD sold more units than the year before but at low prices, leaving it with just 5.6% of total revenues.

Meanwhile, National Semiconductor's (NYSE: NSM) Cyrix unit also gained market share, to 5.6% in the fourth quarter, up from 3.7% in the previous quarter and 3.6% a year ago. But Cyrix's share of the revenue dollars was a mere 1.4%. For full-year 1998, Intel's market share dropped to 80.4% from 86.2% in 1997. AMD's climbed to 11.9% from 6.7%, and Cyrix's rose to 4.2% from 3.7%.

News to Go

Microsoft (Nasdaq: MSFT) announced plans for a 2-for-1 stock split on or about March 26, subject to shareholder approval, to keep its stock "broadly accessible to individuals." This would mark the eighth stock split since the company went public in March 1986.

Long-distance giant AT&T (NYSE: T) reported fourth quarter operating earnings of $1.00 a share, up from $0.69 a year ago and right in line with estimates. Total revenues for the quarter jumped 4.8% to $13.528 billion from $12.903 billion in Q4 1997, though the company's consumer services revenue fell, as expected, due to aggressive discounting in its efforts to retain long-distance customers. AT&T predicts Q1 1999 EPS of about $0.92 to $0.95 (a 33% to 38% gain over the same year-earlier period) and 1999 EPS of $4.20 to $4.30.

Citigroup (NYSE: C) announced Q4 EPS (before charges) of $0.60, down from $0.80 the year before but ahead of analysts' expectations of $0.56. The company's co-CEOs said "substantial progress" has been made in the integration of Citibank and Travelers but admitted that progress is slower in Citigroup's corporate business due to the extreme market volatility in global markets.

Yahoo! (Nasdaq: YHOO) and Rupert Murdoch's News Corp. (NYSE: NWS) have entered into a major marketing relationship spanning network and cable TV and the Internet. Yahoo! will advertise throughout Fox's pre- and post-game Super Bowl programming and sponsor the debut of The Family Guy, a new cartoon premiering after the big game. The deal also involves cross-promotions between Yahoo! and Fox Sports Net, Fox Television Station Group, FX, Fox News Channel, Twentieth Century Fox Film, Fox Music, and Fox Interactive.

Minnesota Mining & Manufacturing, or 3M (NYSE: MMM), released Q4 EPS of $0.86 (before charges) compared with $0.89 last year and analysts' mean estimate of $0.80. The company said Q4 earnings were hurt by "currency effects, modest sales growth and reductions in factory output to better align inventory levels for 1999."

Turf and forage-seed company AgriBioTech (Nasdaq: ABTX) said it ended its three-month, Merrill Lynch-led search for a buyer "due to market conditions." This morning, the company announced it has purchased privately held biotechnology company HybriGene LLC. AgriBioTech CEO Johnny Thomas will hold a conference call today at 12:30 p.m. Eastern. To participate, call (800) 553-0326.

Earnings to Go:

Allegiance Corp. (NYSE: AEH) -- Q4 EPS: $0.29 vs. $0.21 last year; estimate: $0.28
ICOS Corp. (Nasdaq: ICOS) -- Q4 EPS: profit of $1.22 vs. loss of $0.15 last year; estimate: profit of $1.49
Lexmark International Group (NYSE: LXK) -- Q4 EPS: $1.16 vs. $0.78 last year; estimate: $1.11
Mothers Work (Nasdaq: MWRK) -- fiscal Q1 EPS: $0.35 vs. $0.17 last year; estimate: $0.21 (one analyst)
Union Carbide (NYSE: UK) -- Q4 EPS: $0.18 (before gain of $0.31) vs. $1.04 last year; estimate: $0.18

More Foolishness

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor