"Politics is supposed to be the second-oldest profession. I have come to realize that it bears a very close resemblance to the first." -- Ronald Reagan
BREAKFAST WITH THE FOOL
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News to Go
It's election day. Time to voice your vote. Like, what matters more, the top or the bottom line? VoiceStream Wireless (Nasdaq: VSTR) reported revenue of $562.2 million, well ahead of analyst expectations and 317% higher than last year's $134.9 million showing. Strong subscriber growth led the way. But bloated expenses found the company also producing a much wider loss than was projected. The company is in the process of being acquired by Germany's Deutsche Telekom (NYSE: DT).
The logic may seem absurd in this era of perpetual obsolescence. The failure to plant seeds today means less of a harvest to reap tomorrow. But Adobe feels that it can still seize the future by trimming research expenditures from 20% to just 19% of projected sales.
"Our R&D investment is larger than the annual revenues of most of our competitors, and we do think that gives us a competitive advantage," Adobe President Bruce Chizen told Fool analyst Zeke Ashton back in September. So even if the company does hold back on research, it should still remain ahead of the pack.
Like hue-tinkering on Adobe Photoshop, it appears that the prospects are brighter than the 20% growth analysts were projecting. The company expects revenue growth of at least 25% next year. With operating margins now set to climb from 31% to 32%, estimates are now poised to be revised about a dime above the $2.56 consensus.
In the meeting -- which ran just over two hours long -- the company shared its enthusiasm over its role in the new economy. Adobe has gone from a leader in the realm of desktop publishing for print media to serving as the software backbone for online and network publishing. Its ePaper Solutions segment is expected to provide a 65% growth spurt in sales next year. That's a stark contrast to the print publishing side. There the company is looking for just a 10% hike in revenue. Adobe has always known how to touch up a picture, and this horizon seems to have a crusty glow.
Knocking chips off the global building blocks, two sources abroad warned of lower chip prices earlier today. First it was Douglas Lee, an executive director at Goldman Sachs in Asia, predicting that DRAM prices will continue to fall well into next year. Then Germany's largest semiconductor maker, Infineon Technologies (NYSE: IFX), warned of weaker demand and consequently lower prices in its memory business during the current quarter. However, Infineon reported a strong close to its fiscal year and maintains a positive outlook through the next three years thanks to growth in other high-margin businesses.
General Electric (NYSE: GE)? No. Not quite. But Dollar General (NYSE: DG) and Emerson Electric (NYSE: EMR) reported earnings this morning. Both companies held their ground with results that were in-line with analyst expectations.
Casino gaming equipment maker International Game Technology (NYSE: IGT) has beaten the house. The company trumped the quarterly estimate of $0.63 a share by reporting earnings of $0.66 before charges. The strong hand was there for the taking. All one had to do is count cards. Two weeks ago Anchor Gaming (Nasdaq: SLOT) also topped projections on the hot demand for its video gaming machines themed to television shows such as Jeopardy! and I Dream of Jeanie. Those devices are being rolled out as a joint venture involving both companies. How popular are IGT's slots and video-gaming machines? The company topped the billion-dollar mark in revenue this year.
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