Today, the business cycle dating committee of the National Bureau of Economic Research in Washington, D.C., said that we're out of the recession -- in fact, the recession that began in March 2001 actually ended the following November. Don't you feel better now? The economic pain of the last two years has really all been in our heads. Thank goodness the government cleared that up.

Actually, the committee declined to comment on whether or not we've slipped into another recession since then. And presumably it would take another two years to make that determination.

Stocks could have cared less, with the three major indexes falling into the red today.

In today's Motley Fool Take:

Apple's Cheery iTune

Apple (Nasdaq: AAPL) lovers, rejoice! First, McDonald's(NYSE: MCD) announces it will offer chubby-faced, knee-high Happy Meal gobblers the choice of apple slices and caramel dipping sauce along with the traditional side of fries. Now, Apple Computer turns in its highest quarterly sales in nearly three years.

Last night's report from the artsy computer maker gave the faithful plenty to cheer about. A broadening product line helped boost Apple's third-quarter revenue 8% to $1.55 billion. Drilling down, a drop-off in iMac shipments was offset by a welcome surge in the sale of iPod music players and high-priced laptops.

Earnings? You had to ask. Net profit fell to just $19 million from $32 million a year ago. To put that in its sad perspective, Apple's $4.5 billion in idle cash and short-term investments delivered the lion's share -- $15 million in interest income before taxes.

But let's sidestep profits for the moment and get back to the spiked punch bowl. The best top line in 11 quarters showcases Apple's strength: portables. PowerBook sales were chipper and 6.5 million downloads from its iTunes store helped move more than 300,000 iPods.

Apple even gained ground in the education market -- something that seemed hopeless when it surrendered its lead in the classroom to Dell(Nasdaq: DELL) years ago.

Whether you consider CEO Steve Jobs the devil or a multimedia Midas, he's got Apple moving in the right direction. My hunch is that presently this goes to the bottom line. Apple is looking to improve its profits sequentially as it closes out its fiscal year. Apple lovers, rejoice!

Discussion Board of the Day: Apple

Is Apple evolution being helped as it starts to think outside of the desktop box? Is Steve Jobs really the devil or just a very lucky visionary? All this and more -- in the Apple discussion board. Only on Fool.com.

Altria Down, Not Out

Altria Group (NYSE: MO) , parent of Philip Morris USA and majority owner of Kraft Foods(NYSE: KFT), reported a drop in second-quarter revenues and earnings today. The news notwithstanding, there were positive trends in the quarter, including increased U.S. retail market share for its cigarette brands and strong international growth. It also remains an attractive stock, thanks to its hefty dividend yield.

Revenues declined 1.3% to $20.8 billion. Altria sold a chunk of its Miller Brewing division last summer, so it's lacking the $1.4 billion in beer sales that Miller contributed last Q2. The company earned $2.44 billion ($1.20 a share, including $0.06 in charges) in the quarter, below the $2.61 billion ($1.21 a share) it took in during the year-ago period.

Domestic tobacco revenues and operating income were snuffed out by heavy competition from cheaper cigarettes and increased promotional spending. Still, Philip Morris USA's stable of brands claimed more market share during the period, increasing to 48.5% sequentially from the first quarter's 48.3% and the fourth quarter's 48.1%. Shipment volume also improved, growing 4.1% to 48.2 billion.

Internationally, Altria's tobacco business returned operating income growth of 14.3%. A weak dollar, higher prices abroad, and increased demand helped generate Philip Morris International's solid results and $1.6 billion in income.

For investors, Altria's lure is its fat dividend yield. The company's stock price is often volatile because of the ever-present legal uncertainties, but its yield is a yummy 6.4%. That's income worth enduring some stock shimmies for.

Quote of Note

"A cigarette is the perfect type of a perfect pleasure. It is exquisite, and it leaves one unsatisfied. What more can one want?" -- Oscar Wilde, 1854–1900, Anglo-Irish playwright and author

Ford's Motown Blues

The world's second-largest automaker, Ford Motor Co.(NYSE: F), couldn't get its engine revving in the second quarter, and reported results best described as "lame." Thirty-five billion in automotive sales resulted in net income of just $3 million.

Before you cry Mr. Ford a river, the quarter was saved by Ford Credit division, which managed $401 million in net income -- nearly all of the company's $0.22 earnings per share (down from $570 million, or $0.29 per share, last year). Second-quarter revenue skidded to $40.7 billion, off from $42.2 billion in the same quarter last year.

Ford blamed its ongoing slowdown on the poor economy. This may be partially true, but a glance at competitors tells a different story. Ford saw flat sales in June, but new vehicle sales were up 4.1% industry-wide, with DaimlerChrysler(NYSE: DCX) increasing sales 7%; General Motors(NYSE: GM), 1.3%; and the Japanese automakers cleaning up. Sales at Honda(NYSE: HMC) climbed 8.7%; Mitsubishi, 9.6%; Toyota(NYSE: TM), 10.9%; and Nissan's(Nasdaq: NSANY) sales rocketed 21.5%.

The only context in which Ford's results look somewhat "OK" is when you consider that total industry sales in the first half 2003 declined 2% compared to last year. So, Ford isn't the only one sucking wind. In fact, all the U.S. automakers need a serious tune-up of their business plans.

Since September 2001, the auto industry has relied on oversized rebates and 0% financing to drive sales. According to CNW Market Research and Motor Trend, in June this year, sales incentives reached a record $4,463 per vehicle. These offers kill automakers' single-digit profit margins, knocking them from 4% or 3% to 1% or lower.

And now the industry can't take away incentives without serious repercussions. Incentives have become a primary sales motivator, to the point that many analysts no longer consider sales volume a meaningful barometer. It's estimated that without incentives, auto sales would drop from 16.4 million units this year to around 15 million, a level not seen since 1994.

This Catch-22 leaves the debt-heavy automakers with one primary option: Keep incentives and cut costs. Ford plans to slice $2.5 billion from the budget this year, saying it is "looking everywhere" for expense reductions. ("Is this dashboard cardboard?") Even with record cuts, the company expects to lose $0.15 per share in the third quarter. However, Ford still hopes to earn $0.70 per share for the year, which would be an increase from $0.47 earned in 2002.

The bottom line: Even after the economy turns up, automakers will remain extremely leveraged, cost-heavy, and always under the gun of competition. Most investors are better off elsewhere. In other words, consider a detour.

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Quick Takes

Rusting vehicle giant General Motors(NYSE: GM) reported Q2 EPS off 40% on flat revenues, due to a combination of lower production and higher rebates. GM hopes for increased sales and lower rebates. It better, after offering $17.6 billion in bonds -- the biggest sale ever -- at the end of the quarter to address a $25 billion pension fund shortfall.

Plane maker Boeing(NYSE: BA) will cut another 4,000 to 5,000 jobs, reaching 40,000 by year-end. Aircraft production is about 50% of levels four years ago. Boeing's business is half commercial and half government.

Leading the Nasdaq's losers today is wireless billing services provider Boston Communications Group(Nasdaq: BCGI), off about 40% on jitters that contract renegotiations with its largest customer, Verizon(NYSE: VZ), may fall through.

DVD software maker InterVideo(Nasdaq: IVII) topped Nasdaq gainers, up as much as 39% in its first day of trading. Its IPO price was $14. (Jeff Fischer includes the company in his 10 IPOs to Watch.)

And Finally...

Today on Fool.com:

Contributors:
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim