Would you like to work your way up to the top of your organization? If so, USA Today says it helps to be athletic, especially for women. Citing such stars as eBay (Nasdaq: EBAY) CEO Meg Whitman (lacrosse and squash teams at Princeton) and Betsy Bernard, head of AT&T's (NYSE: T) consumer division (ski racing), the paper quotes a study showing 82% of female execs participated in post-elementary school organized sports, compared to 61% of the general population. Why the edge for athletes? They are more competitive, and they learned more about winning during their playing days.
The Motley Fool 50, a former NCAA wrestling champion at Slippery Rock University, slipped a bit today but finished ahead of the S&P 500 and Nasdaq. Losers!
In today's Motley Fool Take:
Xerox Copies Success
At a time when some grand old names have been struggling mightily or even (gasp!) going out of business altogether, it's refreshing to see one with a chance to make it: Xerox (NYSE: XRX).
Two days ago, the 96-year-old document specialist announced an agreement with the Securities and Exchange Commission (which had been investigating possible Xerox accounting irregularities) to fork over $10 million in fines and restate its financial performance between 1997 and 2000.
A glance at a 5-year chart of Xerox's stock price shows a long descent, and, in the past year, a significant recovery. Its troubles have included massive debt and competitors successfully taking market share. Flash back to the (not-yet-revised) balance sheet for 1997 and you'll see a company with more than $12 billion in debt, net operating cash flow of just $472 million, and a mere $75 million in cash. Yikes. By 2000, the firm's debt had swollen to more than $16 billion, with cash up to $1.7 billion, but net operating cash flow a negative $663 million. A turnaround plan was formulated by the end of 2000, when the stock had fallen to under $4 per share. It featured cost cutting, the sale of assets, and getting out of the financing biz (Xerox is unloading its financing obligations on other companies).
Today, that plan is beginning to show signs of promise. The stock price has recovered to north of $10 per share. Debt is still significant but is down by 25%. The company just returned to operational profitability in its fourth quarter and sports some $4.5 billion in cash. (Here's the company's full fourth-quarter earnings report, in Acrobat PDF format.) According to CEO Anne Mulcahy, "The benefits of our turnaround actions along with additional cost reductions will continue to enhance our bottom line."
If Xerox continues to execute its plans well, it might be worth keeping an eye on. At Xerox's website, you can read some informative management presentations.
Tax Deduction
You may have heard the weighty news announced yesterday: Taxpayers are allowed to deduct the costs of medically necessary weight-loss programs. But before you get too excited, there are several restrictions on that fat-reduction tax deduction:
- Only the costs of the program itself are deductible, not the chalky shakes or cardboard-based snack bars. The IRS figures you'd be spending that money anyhow on regular food (a safe assumption, since people don't gain weight from not eating).
- Only costs not covered by a health plan are eligible.
- A doctor must have prescribed the weight loss as treatment for a disease, such as obesity. Folks looking to slim down for the class reunion can't take the deduction (though models and exotic dancers may be able to claim weight-loss programs as a business expense -- but you'd better ask a tax professional first).
- Only expenses that exceed the 7.5% floor for medical expenses can be deducted.
That last one is the real kicker, and a concept that all taxpayers should understand. And that leads us to...
Tax Countdown: 12 Days
Finding the Floor
Many deductions are subject to a "floor," i.e., only expenses that exceed a certain percentage of the taxpayer's adjusted gross income (AGI) can be deducted. Besides the 7.5% floor for medical expenses, there is a 10% floor for casualty and loss deductions and a 2% floor for miscellaneous deductions.
Let's look at an example: Meet Brutus "Bovine" McBeef, who has an AGI of $40,000 from his job as a hamburger taster (for quality assurance purposes). His doctor says that Brutus must lose 50 pounds. If Brutus joins a weight-loss program, he'll be able to deduct those medical expenses that exceed 7.5% of his AGI -- in his case, $3,000. If the costs of the program he joins -- plus any other eligible medical expenses, such as the costs of his smoking cessation and alcoholism programs -- add up to $3,829, then Brutus will be able to deduct just $829 ($3,829-$3,000).
The lesson: Put the prospects of a tax deduction in context. In most cases, several conditions must be met. And, for goodness sake, turn off your computer and get some exercise!
Wall Street Goes to Hollywood
Between the layoff-peppered economic malaise and the worrisome state of world events, we've become a nation of entertainment-starved homebodies. Does that leave room for a happy ending? It does if you're video rental specialist Hollywood Entertainment (Nasdaq: HLYW). The company is giving analysts a run for their money today after burying first-quarter profit projections of a quarter a share with new targets pegged somewhere between $0.28 and $0.30 a stub.
As the country's second-largest chain behind Blockbuster (NYSE: BBI), Hollywood has been riding several favorable industry trends. The launch of next-generation video game consoles has spurred software rentals from gamers who want to test out the latest titles, for example. Also, the light-speed adoption of the less-cumbersome DVD format has created a welcome inventory situation. And, yes, suddenly there is no shame in staying in for the night and firing up the VCR to watch new releases with family and friends.
While issues like video piracy and pay-per-view popularity were supposed to leave a mark, it has been little more than a flesh wound to the video-rental behemoths. Hollywood has the foot traffic to show for it. Comps were up 7% for the March quarter, well ahead of the original 3% bar the company had set for itself. For the year, the company expects earnings to come in as high as $1.10 a share. That would be a happy ending indeed for a company that has seen its stock triple over the past year. As they say in Hollywood, if the shoe fits... find another one.
Seen any good flicks lately? Want to know what's worth renting on your next trip to the video store? All this and more -- in the Great Movies discussion board. Only on Fool.com.
Shameless Plug: Beginning Investing
Are you new to investing? Like working at your own pace? Tired of all these questions? Then we've got just the thing for you: our self-paced, Beginning Investing seminar. Ideal for all new Fools, you'll gain knowledge in just eight lessons that will help you for a lifetime.
Things are looking up at DuPont (NYSE: DD). The nation's top chemical maker revised its first-quarter guidance higher today, buoyed by lower fixed costs and strong agricultural sales. The company says earnings will exceed even the highest analyst estimate of $0.51 a share.
Philip Morris (NYSE: MO) is thinking about selling its Miller Brewing unit to South African Breweries (Other OTC: SBWUY). According The Wall Street Journal, the asking price is about $5 billion. If the sale goes through, SAB would be the world's second-largest brewer, trailing only Anheuser-Busch (NYSE: BUD).
For the first time ever, a child in Britain has been cured by gene therapy. Eighteen-month-old Rhys Evans, the "boy in the bubble," was born without an immune system. "We see him now playing with other children and it is just amazing," said his mother. These are the days of miracle and wonder.
Way up: Footwear maker Skechers USA (NYSE: SKX) screeched up 13% after it said it would beat first-quarter estimates by at least 25%.... WebMethods (Nasdaq: WEBM) wafted 9% higher as the software maker said fourth-quarter results will exceed its previous guidance.
Way down: Confirming it is under an SEC inquiry regarding off-balance sheet borrowing agreements, cable television provider Adelphia Communications (Nasdaq: ADLAC) was axed 7%.... Avid Technology (Nasdaq: AVID), maker of digital editing systems, lowered its first-quarter guidance and was gonged for an 16% loss.... SmartForce (Nasdaq: SMTF) was slammed down 33% after the employee-training specialist said it would lose about $0.25 a share in the first quarter instead of earning $0.05.
And Finally...
Today on Fool.com: We got some things right and got some wrong. See our best and worst stock opinions from the past few years in Garlands and Gaffes.... Whitney Tilson digs deeper into stock options and the perverse incentives they cause.... Find out how to get rid of worthless stock in Fool's School.
Contributors:
Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Dayana Yochim
RSS Headlines
Fool UK
