<BREAKFAST WITH THE FOOL>

Friday, February 26, 1999

"He was a self-made man who owed his lack of success to nobody." -- Joseph Heller

Latest Market Numbers

Philips Offers to Buy VLSI

Europe's largest semiconductor company Philips Electronics NV (NYSE: PHG), of the Netherlands, has made a $777 million bid to buy San Jose, California-based chipmaker VLSI Technology (Nasdaq: VLSI). The cash offer amounts to $17 per share, a price that's about 58% above VLSI's closing price yesterday of $10 3/4. Philips has asked for a response by March 3.

The Dutch consumer-electronics company said there's virtually no overlap in the two firms' businesses and that VLSI would help strengthen its presence in the U.S. and serve as the "cornerstone" of its strategy for Philips Semiconductors. The acquisition would give the company a broader range of chips for its electronic consumer products and reinforce its main business as it unloads unprofitable assets and reduces costs. VLSI designs and manufactures custom and semi-custom integrated circuits for the wireless communications, networking, consumer digital entertainment, and advanced computing markets.

The deal would largely be financed through existing cash balances yet still leave Philips with more than $5 billion in cash. Philips is flushed with cash from the sale of its PolyGram music company to Canadian spirits and entertainment company Seagram Co. (NYSE: VO).

News to Go

The Federal Communications Commission (FCC) ruled that connecting to the Internet constitutes a long-distance call. Although the FCC said the ruling won't result in higher connection costs for consumers, some consumer groups worry that Internet dial-up calls will be hit with the same charges levied on long-distance voice calls. The decision was good news for the Baby Bells, which will no longer have to pay independent phone companies used by many Internet service providers "reciprocal compensation" for routing calls onto the Internet.

Walt Disney Co. (NYSE: DIS) appointed ABC chief Robert Iger to the new post of president of Walt Disney International to oversee the entertainment company's expanding international operations. Steven Bernstein, formerly chairman of ESPN and president of ABC Sports, will take over as president of ABC.

The world's largest automaker General Motors (NYSE: GM) increased its 1999 U.S. industry forecast of car and truck sales to 15.5 million cars from 15 million. The company expects its own market share to rise, as well.

Office supply retailer Office Depot (NYSE: ODP) announced a 3-for-2 stock split, payable April 1.

Networking equipment maker Fore Systems (Nasdaq: FORE) said it has acquired privately held Euristix Ltd. for about $81 million in stock, adding to its product line software that helps phone companies set up and manage data networks. Fore expects to take a pre-tax charge of $30 million to $35 million in its fiscal fourth quarter, ending March 31.

Latest Earnings Announcements:

Ballard Power Systems (Nasdaq: BLDPF) -- Q4 EPS: loss of $0.02 vs. loss of $0.02 last year
Datum Inc. (Nasdaq: DATM) -- Q4 EPS: profit of $0.01 vs. $0.01 last year; estimate: loss of $0.07
Intuit (Nasdaq: INTU) -- fiscal Q2 EPS: $1.34 (before gain) vs. $0.95 last year; estimate: $1.30
Lycos (Nasdaq: LCOS) -- fiscal Q2 EPS: loss of $0.03 (before charges) vs. profit of $0.01 last year; estimate: loss of $0.04
MySoftware Co. (Nasdaq: MYSW) -- Q4 EPS: profit of $0.08 vs. loss of $0.38 last year; estimate: profit of $0.07 (single analyst)
Novell Inc. (Nasdaq: NOVL) -- fiscal Q1 EPS: $0.08 vs. $0.04 last year; estimate: $0.08
Wind River Systems (Nasdaq: WIND) -- fiscal Q4 EPS: $0.20 (before charges) vs. $0.15 last year; estimate: $0.19
W.R. Berkley Corp. (Nasdaq: BKLY) -- Q4 EPS: loss of $0.43 (before one-time items) vs. profit of $0.72 last year; estimate: profit of $0.53
Zebra Technologies (Nasdaq: ZBRA) -- Q4 EPS: $0.29 (before charges) vs. $0.44 last year; estimate: $0.46

More Foolishness

The Rule Breaker Portfolio will add yet another stock to its holdings. We're talking about none other than eBay... See what Wendy's VP of investor relations has to say about current conditions in the fast food industry in this week's StockTalk interview... Check out this Daily Double: EarthLink Network.

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