Thursday, June 17, 1999

"Too many of us look upon Americans as dollar chasers. This is a cruel libel, even if it is reiterated thoughtlessly by the Americans themselves." -- Albert Einstein

Latest Market Numbers

Gaylord's Grand Ole Earnings Warning

Things ain't so grand at the Grand Ole Opry. Hospitality, broadcasting, and cable company Gaylord Entertainment Co. (NYSE: GET), which runs the Opryland hotel, said it expects to report second-quarter earnings of about $0.02 per share, well off last year's $0.22 profit and missing the $0.14 estimate four analysts gave First Call.

Gaylord attributes most of the shortfall to trouble at Opryland, where average room rates are down slightly and food and beverage sales have disappointed. Sales at the company's Unison label, which produces acoustical and instrumental recordings, have also been slow.

But CEO Terry London remains optimistic about 1999. "We remain committed to our growth strategies, and we expect to meet aggregate estimates for the second half of 1999," he said in a statement. Already hurt by a $0.14 per share loss in Q1, Wall Street expects Gaylord to report full-year EPS of $0.57, down from $0.74 in 1998, before turning upward again next year.

Much of what London touts as growth opportunities -- the expansion of the Opryland concept into other markets, the development of Internet strategies for its country and gospel music and convention hotel operations, and the redeployment of capital from the $800 million sale of KTVT-TV to CBS (NYSE: CBS) -- don't appear likely to bear overwhelming amounts of fruit immediately, however.

Indeed, said London, "Although the implementation of these strategies may impact earnings in the short term, we believe that they will ultimately create significant value."

One factor that might help boost results later in 1999 is that Gaylord's Word Entertainment division shifted some product releases into the second half from Q2, which didn't help sales for the quarter but could stand to provide a boost in later periods.

News To Go

Investment banking and asset management company Friedman, Billings, Ramsey Group (NYSE: FBG) said it plans to offer online trading at its fbr.com website by the end of the second quarter.

Precision machined and molded rubber and plastic products maker Newcor (AMEX: NER) said it will close its Livonia, Mich., plant over the next several months. Production at the plant will be transferred to other Newcor plants in the state, but that won't help the 60 employees, including management. The company expects a $0.04 per share charge in Q2 in connection to the closing.

Battery manufacturer Rayovac Corp. (NYSE: ROV) said it agreed to buy the consumer battery business of privately held ROV Limited, a company created by Rayovac's former owner in 1982, for $155 million. Following the acquisition of ROV -- a Latin American battery maker and marketer with 1998 sales of $97 million -- Rayovac will control brand rights for Rayovac battery products everywhere in the world except Brazil.

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Dave Marino-Nachison (TMF Braden), Writer
Jennifer Silber (TMF Amused), Editor