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Wednesday, May 5, 1999

"I believe that economists put decimal points in their forecasts to show they have a sense of humor." -- William Simon

Latest Market Numbers

AT&T, Comcast Sign Deal

Clearing the way for its bid to acquire cable TV operator MediaOne Group (NYSE: UMG), AT&T (NYSE: T) signed a deal with rival bidder Comcast (Nasdaq: CMCSK) in which the two companies will swap various cable systems to improve their geographic coverage through clustering. The deal will give Comcast roughly 750,000 new subscribers and allow it to boost its number of cable subscribers by about 2 million households.

Because Comcast is getting more subscribers than it's contributing to the exchange, it will pay AT&T about $4,500 per added subscriber, for a total of $3 billion to $3.5 billion. In addition, contingent on the completion of AT&T's proposed acquisition of MediaOne, Comcast will also receive a three-year option from AT&T to buy additional cable systems with some 1.25 million subscribers for around $5.7 billion, to be paid using Comcast Class A shares. Comcast has also agreed to offer AT&T-branded telephone services in all of its markets and will walk away from its scrapped merger bid for MediaOne with a $1.5 billion break-up fee.

The CEOs of AT&T and Comcast will hold a conference call this morning at 10:30 a.m. Eastern time. To listen, dial (800) 553-0358 to access the call from within the U.S. and (612) 332-0107 from outside the U.S. A replay will be available for 48 hours starting today at 2:00 p.m. Eastern time. U.S. callers should dial (800) 475-6701, while non-U.S. callers should dial (320) 365-3844. The access code for both is 448409.

News to Go

Microsoft (Nasdaq: MSFT) is expected to invest about $5 billion for a 2% to 3% stake in AT&T (NYSE: T), The New York Times and USA Today reported. In exchange, AT&T would commit to using Microsoft's Windows operating system in the set-top boxes the company will use to offer digital services.

Entertainment and media giant Time Warner (NYSE: TWX) reportedly will tap former Ticketmaster Corp. CEO Fred Rosen to head the Columbia House record and video club it jointly owns and operates with Sony Corp. (NYSE: SNE), according to The Wall Street Journal. Time Warner and Sony plan to revamp Columbia House's lackluster Internet site, Total E, in an effort to better compete with online music retailers such as Amazon.com (Nasdaq: AMZN).

Instinet Corp., a unit of Britain's Reuters Group PLC (Nasdaq: RTRSY) and the dominant player in institutional trading of Nasdaq stocks known for its "after-hours" trading for institutions, is looking to partner with online brokers to offer trading to individual investors during and outside regular trading hours, The Wall Street Journal reported.

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.)

Egghead.com (Nasdaq: EGGS) -- fiscal Q4 EPS: loss of $0.50 vs. loss of $1.70 last year; estimate: $0.56
Humana (NYSE: HUM) -- Q1 EPS: $0.20 vs. $0.30 last year; estimate: $0.22
Legg Mason (NYSE: LM) -- fiscal Q4 EPS: $0.45 vs. $0.40 last year; estimate: $0.43
Priceline.com (Nasdaq: PCLN) -- Q1 EPS: loss of $0.12; estimate: loss of $0.13 (no year-over-year comparison because the business was launched in April 1998)
Suiza Foods (NYSE: SZA) -- Q1 EPS: $0.60 vs. $0.54 last year; estimate: $0.58

More Foolishness

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