We always strive to bring you interesting tidbits in this space, and today we have good news and bad news. The good news is the rescue of Forgea, a mixed-breed terrier that had been stranded at sea aboard an abandoned refueling tanker for 24 days. More than $50,000 had been spent trying to save the "miracle mutt," who was left behind after the tanker caught fire and the crew was picked up by a passing ship.
The bad news is the passing of Ruth Handler, co-founder of the Mattel (NYSE: MAT) toy company and creator of the Barbie doll. Named for Handler's daughter Barbara, an incredible one billion Barbie dolls have been sold since the first one in 1959. Barbie's impact is best summed up in a CNN.com story: "The impossibly well-endowed doll -- her original figure would be about 39-18-33 if she were human -- has infuriated feminists, inspired artists, and intrigued academics around the world. Barbie even was placed in the official 'America's Time Capsule' buried in 1976."
In more mundane Monday news, The Motley Fool 50 drifted in light winds and, like the rest of the market, finished down slightly.
In today's Motley Fool Take:
When chicken processing giant Tyson Foods (NYSE: TSN) won the bidding war for beef and pork processor IBP last year, CEO John Tyson defended the $3.2 billion price tag by calling it a "once-in-a-lifetime opportunity." He noted that IBP would add 15% to earnings in the first year alone. Now, there's some real evidence of positive synergy from the deal, which finally closed last September.
Tyson reported second-quarter earnings of $0.18 per share this morning, on revenue of $5.84 billion. The pre-IBP numbers from the same period last year showed a loss of $0.03 per share, and revenue of $1.86 billion. Tyson also predicted improved efficiency from the acquisition and the numbers seem to bear that out, as operating margin improved from 1.3% to 3.1% year-over-year.
The numbers are good, especially considering the rather difficult current meat and poultry environment. This is usually a tough quarter seasonally, and Russia instituted a ban on U.S. poultry imports about a month ago. Regardless, the company is sticking with its full-year guidance of $1.10-$1.20 per share.
Mergers and acquisitions don't always work out well (witness the billions in write-downs in the tech sector recently), but in this case it looks like chicken, beef, and pork make for a tasty combination.
"Capitalism without bankruptcy is like Christianity without hell." -- Frank Borman, former CEO of now-bankrupt Eastern Airlines
High Schoolers Fail Financial Literacy Test
Everyone knows that the best investment for an 18-year time horizon is... U.S. savings bonds. The next best place, of course, is... a savings account.
Troubling statements, eh? If you think so, then you'll be even more troubled by the results of a recent survey of high school seniors. One question asked which investment would have the highest growth over the next 18 years. More than 40% chose a U.S. savings bond and 37.5% chose a savings account (the other two choices -- stocks and a checking account -- garnered 18.7% and 3.6%, respectively).
The survey was conducted by the Jump$tart Coalition for Financial Literacy, a nonprofit group that receives direction and sponsorship from government entities (such as the Federal Reserve) and financial institutions (such as Visa and Merrill Lynch). This past December, January, and February, 4,024 high school seniors in 183 schools answered 31 questions about personal finances. On average, the students answered 50.2% of the questions correctly. Here's a sampling of the survey's other findings:
- Under what circumstances, the survey asked, should you borrow money to buy something? More than a third (37.7%) of respondents chose "when the interest on the loan is greater than the interest you get on your savings."
- When asked to complete the sentence, "Retirement income paid by a company is called...," 33.3% answered "Social Security." Slightly more respondents, 35.1%, chose the correct answer ("pension").
- More than 20% of participants thought there was a 5.5% national sales tax, and 17% thought the sales tax is deducted from paychecks.
- An overwhelming majority thought that Britney Spears could defeat Alan Greenspan in a round of celebrity boxing, though 27% gave Greenspan a fighting chance if he were allowed to tag-team with wife Andrea Mitchell. (Just kidding -- but would you be surprised?)
So what will it take to uncloud the minds of America's future? As they say, clarity begins at home. If you have kids, teach them about money, early and often. (Here are some ideas.) Also, encourage them to manage their own dough. Students who don't have a savings or checking account scored lower on the financial literacy test.
Even if you don't have kids, prod your local schools to incorporate personal finance education into the curriculum. As it is, less than 10 states require it. (What is your state doing about it? Check this link.) According to Dara Duguay, executive director of Jump$tart, federal funds exist for this type of education, thanks to recent legislation. Schools just need to take advantage of it.
There are some stains that Stainmaster just can't get out. Chemical giant DuPont (NYSE: DD) announced it would be letting go of 2,000 workers, or roughly 10% of its textile employees. Despite the prestige of DuPont's LYCRA and Stainmaster brands, cheap imports have put a dent in the 200-year-old company's textiles and interiors business. Is this the proper tonic for the company? Is the inventor of nylon worth stocking?
As our own Bill Mann pointed out last week, DuPont's seemingly cheap valuation is misleading. It's also clearly in a "hunker down" mode, having sold off its pharmaceuticals and oil and gas operations in recent years. Layoff notices have been flying fast and furious since last year and while the company's stance on streamlining its operations has some merit, there is no such thing as a painless makeover.
The tab of restructuring its textiles business before eventually spinning it off will result in a second-quarter charge between $0.12 and $0.16 a share. The go-go acquisitive days are clearly over for DuPont. The company's tagline brags about the "the miracles of science," but now the company is coming to grips with something else: the science of gravity.
What's that chemical between us? Is DuPont doing the right thing? What's so cool about polymers, anyway? All this and more -- in the Chemicals Discussion Board. Only on Fool.com.
There's no better independent help for your financial affairs than TMF Money Advisor. It gives you all the tools you need to plan ahead and -- more importantly -- take action to secure your financial future. Plus, when you sign up for TMF Money Advisor, you'll get the Rule Your Retirement online seminar absolutely free!
Apple Computer (Nasdaq: AAPL) is aiming to strengthen its position in schools and colleges with a new computer designed for the school market -- the "eMac." Looking a lot like the iMac introduced a few years ago, the eMac is priced between $1,000 and $2,000. Learn more in The Wall Street Journal (subscription required, free trial available).
The Supreme Court delivered a blow to disabled workers today, ruling that the Americans with Disabilities Act does not pre-empt company seniority systems. In other words, the disabled should not get preference for assignments over those with seniority, although exceptions may be made for those with "special circumstances."
Two companies you probably haven't heard of are merging. Anthem (NYSE: ATH), one of America's largest health insurers and operators of Blue Cross Blue Shield health plans, is buying Trigon Healthcare (NYSE: TGH) for nearly $4 billion. Anthem operates primarily in eight states, while Trigon operates in Virginia. Both companies also reported earnings today, beating Wall Street expectations and offering upbeat forecasts.
Graphics chipmaker NVIDIA (Nasdaq: NVDA) reported preliminary first-quarter earnings today, with revenues expected to total about $570 million to $580 million, and net income of roughly $79 million to $84 million. The company is also restating its results for 2000, 2001, and most of fiscal 2002. NVIDIA has been under investigation by the SEC, which in November accused 15 company employees and friends of employees of profiting from inside knowledge.
The New York Times offers a roundup of media tidbits (free registration required): Jacob Weisberg, Slate.com's chief political correspondent, will succeed Michael Kinsley as editor of the Microsoft-owned e-zine. Dan Rather is likely to remain at CBS through 2006. The New Yorker's David Remnick is expected to accept several awards this week. Fox News' consultant on military activities in Afghanistan may not be who he said he was. And finally, Rolling Stone is replacing its top editor and planning on shorter pieces and more news.
As Andersen Turns: The Justice Department said "no thanks" to Arthur Andersen's proposal to settle a criminal obstruction charge related to the shredding of Enron documents. The matter appears headed to trial.
Today on Fool.com: Can't make heads or tails of AOL Time Warner? Join in as one Fool debunks the myths.... Matt Richey sizes up Direct Focus, the high-flying maker of Bowflex.... Selena Maranjian teaches us how to engage in a little peeping-Tom investing.... Is inflation eating away at your returns?
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