<BREAKFAST WITH THE FOOL>

Thursday, July 22, 1999

"If a manager spends more than 10 percent of his time on 'human relations' the group is probably too large." -- Peter Drucker

Latest Market Numbers

AOL Posts Strong Growth

Online services provider America Online (NYSE: AOL) turned in fiscal fourth-quarter earnings of $156 million, or $0.13 a share, before charges, up from $58 million, or $0.05 a share, in the same quarter a year ago. That was ahead of analysts' mean estimate of $0.11 a share.

Revenues increased 46% year-over-year to $1.4 billion, with $306 million of that coming from advertising and e-commerce and the bulk still coming from subscriptions. For the full fiscal year, revenues reached $4.8 billion, compared with $3.1 billion the year before. Earnings totaled $396 million, or $0.34 a share, before one-time items.

As of the end of the fiscal fourth quarter, on June 30, the AOL service had 17.6 million members, and CompuServe had roughly 2 million members. These included more than 3 million non-U.S. members. Plus, America Online's ICQ chat service claimed nearly 38 million registered users, AOL Instant Messenger boasted 25 million registered users, and Netscape Netcenter had 17 million users.

Yesterday, America Online announced a strategic alliance with Ameritech (NYSE: AIT) to make digital subscriber line (DSL) broadband connectivity available to 8 million households in Illinois, Indiana, Michigan, Ohio, and Wisconsin by the end of 2001. The partnership builds on the company's previously announced DSL partnerships with Bell Atlantic (NYSE: BEL) and SBC Communications (NYSE: SBC).

News to Go

Amazon.com (Nasdaq: AMZN) reported a wider second-quarter loss of $82.8 million, or $0.51 per share, excluding charges, compared with a loss of $17.0 million, or $0.12 per share, a year ago. That's even with analysts' mean estimate. The online retailer said that its number of customer accounts rose 2.3 million during the quarter to 10.7 million. Amazon also announced a 2-for-1 stock split, which will take effect September 2.

Charles Schwab (NYSE: SCH), Fidelity Investments, and Donaldson, Lufkin & Jenrette (NYSE: DLJ) said they have formed a joint venture with stock dealer Spear, Leeds & Kellogg LP to create their own electronic communications network, or ECN, which automatically matches customers' buy and sell orders. The ECN will trade Nasdaq Stock Market stocks.

Tissue, personal care, and healthcare products company Kimberly-Clark (NYSE: KMB) reported Q2 EPS of $0.72 (before one-time items), up from $0.58 a year ago and ahead of analysts' mean estimate of $0.69. The company also said it has restated financial results for 1995 through the first quarter of 1999 following a SEC review, increasing the company's cumulative earnings for the period by approximately $0.20 per share. The company recorded additional depreciation of about $0.01 per share in the 1999 second quarter and will record similar charges of around $0.03 per share over the balance of 1999 and a similar amount next year.

Earnings to Go:

(Quarterly earnings per share versus that of the same year-earlier quarter and compared with analysts' mean estimate. Earnings exclude one-time charges and gains.)

Adaptec (Nasdaq: ADPT) -- fiscal Q1 EPS: $0.44 (before gain) vs. $0.12 last year; estimate: $0.39

Cendant (NYSE: CD) -- Q2 EPS: $0.24 (continuing operations) vs. $0.19 last year; estimate: $0.22

Ingersoll-Rand (NYSE: IR) -- Q2 EPS: $0.99 vs. $0.85 last year; estimate: $0.98

Legato Systems (Nasdaq: LGTO) -- Q2 EPS: $0.29 (before charges) vs. $0.09 last year; estimate: $0.25

Network Solutions (Nasdaq: NSOL) -- Q2 EPS: $0.17 vs. $0.07 last year; estimate: $0.16

Silicon Graphics (NYSE: SGI) -- fiscal Q4 EPS: $0.12 profit (before gain) vs. $0.31 loss (before charges) last year; estimate: $0.05 loss

SkyTel Communications (Nasdaq: SKYT) -- Q2 EPS: $0.08 profit vs. $0.22 loss last year; estimate: $0.06 profit

THQ Inc. (Nasdaq: THQI) -- Q2 EPS: $0.36 (before charges) vs. $0.25 last year; estimate: $0.32

Walt Disney Co. (NYSE: DIS) -- fiscal Q3 EPS: $0.20 (before charges) vs. $0.20 last year; estimate: $0.19

More Foolishness

TMF Puck gets her UPS IPO as the shipping company announces plans to go public. Read what she had to say in our recent special feature... Louis Corrigan on Apple's new iBook notebook computer... Check out this week's Dueling Fools on priceline.com.

Also, check out the Lunchtime News at 12:30 p.m. for updates on the top stories of the day, and remember to start each business day with Breakfast With the Fool at 9 a.m.

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