<BREAKFAST WITH THE FOOL>

Thursday, April 29, 1999

"It ain't enough to get the breaks. You gotta know how to use 'em." -- Huey Long

Latest Market Numbers

More Red Ink at Amazon

Ever-expanding Internet retailer Amazon.com (Nasdaq: AMZN) posted a wider first-quarter loss of $36.4 million, or $0.23 a share, before charges after the bell yesterday, though that beat First Call's analysts' mean projection of a loss of $0.29. (According to IBES, estimates ranged from $0.23 to $0.31 a share.) In the same year-earlier quarter, Amazon turned in a loss of $10.4 million, or $0.07 a share. Including merger-related charges, the company lost $61.7 million, or $0.39 a share. Revenues for the quarter ramped up 236% to $293.6 million from $87.4 million a year ago.

During its conference call yesterday, Amazon warned that sales growth will slow in future quarters and that it will likely spew 2 1/2 times more red ink the rest of the year compared with this past quarter as the company builds large, automated warehouses and absorbs the operations of newly acquired companies. That would mean a loss before charges for the next three quarters of roughly $0.58 a share compared with analysts' previous forecasts of a $0.56 loss. According to First Call, analysts now expect a loss of $0.62.

"We have begun and will continue to build out a significant distribution infrastructure," said Amazon CEO Jeff Bezos, who added that the company will also continue to invest in systems, people, and product expansion. "For the rest of 1999, we expect to invest more heavily than we have in the past." To listen to a webcast of Amazon's Q1 earnings conference call, click here. It will be available until close of business Friday.

News to Go

Tenneco Inc. (NYSE: TEN) said it will separate its automotive and packaging businesses into two independent companies through a tax-free spinoff to shareowners to be completed this fall. The company also reported first-quarter earnings from continuing operations of $0.27 a share, compared with last year's $0.44 and analysts' expectations of $0.25.

International media and information group United News & Media PLC (Nasdaq: UNEWY) announced it will acquire technology media company CMP Media (Nasdaq: CMPX) for $920 million, or $39 a share, in cash. CMP Media puts out such publications as InformationWeek, Computer Reseller News and Electronic Engineering Times and operates 40 websites including TechWeb.

Drug development services company Parexel International (Nasdaq: PRXL) agreed to be bought by Covance Inc. (NYSE: CVD) for $827 million in stock. The combined company is expected to generate annual revenues approaching $1.3 billion in 1999. Management says the merger will be at least neutral to earnings in 2000 and will be accretive starting in 2001.

Security systems maker Sensormatic Electronics (NYSE: SRM) said the world's largest retailer Wal-Mart Stores (NYSE: WMT) will buy more of its anti-shoplifting systems over the next five years.

Earnings to Go:
(Quarterly earnings per share versus that of the same year-earlier quarter and compared with analysts' mean estimate according to First Call. Where noted, earnings exclude one-time charges and gains.)
Callaway Golf (NYSE: ELY) -- Q1 EPS: $0.18 vs. $0.16 last year; estimate: $0.12
Carmike Cinemas (NYSE: CKE) -- Q1 EPS: loss of $0.27 (before charges) vs. profit of $0.33 last year; estimate: loss of $0.14
CBS Corp. (NYSE: CBS) -- Q1 EPS: profit of $0.04 (from continuing operations) vs. profit of $0.03 last year; estimate: loss of $0.01
Kansas City Southern Industries (NYSE: KSU) -- Q1 EPS: $0.60 vs. $0.41 last year; estimate: $0.57
MediaOne Group (NYSE: UMG) -- Q1 EPS: loss of $0.21 vs. loss of $0.24 last year; estimate: loss of $0.34
Pharmacia & Upjohn (NYSE: PNU) -- Q1 EPS: $0.42 vs. $0.36 last year; estimate: $0.42
Reader's Digest Association (NYSE: RDA) -- fiscal Q3 EPS: $0.23 vs. $0.13 last year; estimate: $0.17
Scientific-Atlanta (NYSE: SFA) -- fiscal Q3 EPS: $0.25 (before gains) vs. $0.22 last year; estimate: $0.19
Unilever (NYSE: UN) -- Q1 EPS: $0.60 vs. $0.61 last year; estimate: $0.59
WellPoint Health Networks (NYSE: WLP) -- Q1 EPS: $1.04 vs. $0.95 last year; estimate: $1.04

More Foolishness

Stocks for Mom: The perfect gift idea for a mom who has everything... Check out this week's Dueling Fools on Network Solutions... Read Jeff Fischer's take on soft-drink giant Coca-Cola in the latest Drip Portfolio report.

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