<THE DRIP PORTFOLIO>
Plus, contact J&J and Touchstone Friday
by Jeff Fischer (TMFJeff)
ALEXANDRIA, VA (July 9, 1999) -- We will see earnings from Intel, Johnson & Johnson, and Mellon Bank soon, and over the following days and weeks, we'll share our thoughts (and yours, from the message boards) on the quarterly results for each company and any accompanying news.
Intel (Nasdaq: INTC) will chime in first (da-da da-ding) on July 13, 1999, reporting second quarter results. Earnings of $0.54 per share, up 64% from last year, are expected. In April, Intel announced first quarter earnings of $0.57 per share, two cents above the consensus estimate, on $7.1 billion in revenue, up from $6 billion the year before and down from $7.6 billion (as expected) during the seasonally strong fourth quarter of 1998. Intel's sales should top $30 billion in 1999, up from $26.2 billion last year, making it one of of the "highest sales" companies in the world.
Intel's conference call replay and live Web broadcast will be found at www.intc.com. The call's replay phone number is 402-220-0146 and it will be available for one week following the call. As is typical, we'll listen and provide a summary and thoughts -- thoughts that in the past have leaned toward the positive, as is our bent, unlike the average bear. So many analysts have been wrong on Intel's stock since 1997 that we could make a case study. Perhaps we will. Intel's live conference call begins at 2:30 pm PT on July 13. The number is 1-800-289-0579, access code 709650.
Next to share earnings should be Johnson & Johnson (NYSE: JNJ). Although the company hasn't yet provided a release date, it typically announces the same day or within a few days (to a week) of Intel. J&J is expected to report $0.82 in earnings per share, up 11% from last year.
As has always been the case, the company's conference calls are closed to "reporters." They're also closed to the public -- tsk, tsk. For a company that is so generous to employees and that continues to provide investors a free dividend reinvestment plan, management falls far short (even legally short) in the conference call department.
This ongoing problem is partly our fault, at least in a backwards way. We've been far too easy on J&J in this matter. It's time for that to change. As shareholders, we have as much right as any fund manager or analyst, legally and otherwise, to hear the company's conference call information in a timely matter, let alone at all. In fact, one could argue that as individual shareowners we have more personal right to the information shared in conference calls than do third-party owners like fund managers. However you look at it, though, J&J is wrong to disallow shareholders at least a replay and ideally live access to calls. This is withholding of information.
If you're a J&J shareholder and you would like to have access to your company's conference calls, please write J&J a kind, Foolish letter and e-mail it to them here, at the bottom of the company's Feedback Web page. (An email address for IR can't be found on the site.) Start your feedback with the title, "Shareholders Deserve Conference Call Access." Inform our friend J&J -- remember, they are a good friend, not an enemy -- that you're a shareholder and you would like, as is your right, to hear all future conference calls that analysts hear. (A quarter two call isn't scheduled yet.)
To review before this quarter's results are shared: Johnson & Johnson's first quarter revenue was $6.6 billion, up 15% year-over-year and 4% sequentially due to strong gains in pharmaceuticals and professional products. Net income increased to $1.1 billion, a 12% rise, and earnings per share totaled $0.82, up from $0.73 a year before and two pennies ahead of the estimate. Again, Wall Street is expecting $0.82 this time around, too.
Finally, Mellon Bank (NYSE: MEL) will report second quarter results on Tuesday, July 20. The consensus earnings per share estimate is $0.45, up 11%. Last quarter, Mellon reported earnings per share of $0.43, up 12% and one penny above expectations. Mellon typically publishes a twelve page earnings report (nearly all financial results) and management provides its conference call replay number in the press release.
Touchstone Friday. George and Brian kept the entire week Foolish. It began on Tuesday with George's Foolish column about his son, George Jr., and his investing style while in high school. Risk and Reward are important considerations for all investors. On Wednesday, Brian was "in the house," whooping it up in a column that reminds us of one of the many wrongs infecting the Wise.
The Wise argument that individuals can never be diversified enough so they should buy mutual funds is probably, sadly, what most people in the country still believe. I calmly suggest you send Brian's Wednesday column, along with a small personal note explaining Foolishness, to anyone you know who invests in underperforming mutual funds due to this gross misconception.
On Thursday, Brian shared a glimpse into his demented mind (remember, he's on anti-psychotic drugs, so cut him some slack) when he offered us a page from his diary. He recently became an Intel shareholder and he wrote how he did so very inexpensively. Or, at least he thought it'd be inexpensive. For the "bad hair" comment, I'm going to charge him double for the Intel share he was given.
We hope to see you on the message boards as we cover earnings next week.
Would you work for a bunch of Fools?