Big Paper Reports
by Paul Larson (TMFParlay@aol.com)
CHICAGO, IL (Oct. 14, 1998) -- The Fool Portfolio had a decent day after trotting ahead to a 1.53% gain on the backs of the portfolio's two largest holdings, America Online (NYSE: AOL) and Amazon.com (Nasdaq: AMZN). AOL and Amazon each saw their bids rise $2 1/2 and $2 1/8 respectively on this October Wednesday. The broader market also had a good day as the indices split the FoolPort's performance with the S&P up a mere 1.07% while the Nasdaq, weak much of last week, got the gold medal and rebounded 2.09%.
Not only is this the season of falling leaves, pumpkins and candy, but this is also the heart of earnings season as companies bring home their report cards for the third calendar quarter. Unfortunately, one of our companies came home Tuesday afternoon with its head held low and sheepishly handed over the disappointing results.
International Paper (NYSE: IP) reported some rather anemic earnings yesterday, and the stock was flushed for a $1 1/4 loss to $44 13/16 today. The company announced earnings of $0.07 versus the $0.34 reported in last year's third quarter. Sales were down slightly to $4.9 billion from the $5.1 billion in the same period a year ago. The company also announced a round of plant closures and job cuts to eliminate some excess costs.
Regardless of how ugly things may seem at the company, International Paper is held in this portfolio as part of our own twist on the Dogs of the Dow -- the Foolish Four. That's to say we have a bit of insouciance (yesterday's word of the day) surrounding the stock and our decision to hold it and the other Foolish Four stocks in the portfolio.
No matter how deep the negative sentiment runs surrounding Big Paper, Ma Bell (NYSE: T), DuPont (NYSE: DD), and Exxon (NYSE: XON), the stocks will have a humble abode here in the Fool Portfolio for the duration of their Foolish Four cycle. Come next year, we will take all of five minutes to scan the current Foolish Four rankings to decide which of the four Dow stocks we will next hold for at least the next year.
Rushing to press the relatively positive results, Trump (NYSE: DJT) was the first company in the portfolio to report earnings this season when they reported $0.27. I find the speed at which the number was announced to be absolutely comical. The company took all of six days from the end of the quarter to report that it was in the black. On the other hand, the results for the second quarter where the company reported a loss of $0.49 took the company over ten-times longer to report. 73 days to be exact.
If that wasn't humorous enough, I find it even funnier that Trump's worst quarterly report of the year, the first quarter, is conspicuously missing from the company's news on their web page. The company only took 37 days from the end of the quarter to report a loss of $0.79 per share that time. Sure, I can understand the company wanting to put itself in as good a light as possible, but this is a little ridiculous. And people wonder why we hold the stock short?
Moving on, Iomega (NYSE: IOM) should report earnings tomorrow. The mean analyst's estimate according to I/B/E/S looks for the company to lose a nickel in the third calendar quarter. Let's hope for the FoolPort's sake that the company can best that number. A replay of the company's post-earnings conference call should be available Thursday evening through Saturday by calling 800-446-4927.
Iomega isn't alone in reporting Thursday as both 3Dfx (Nasdaq: TDFX) and KLA-Tencor (Nasdaq: KLAC) are tentatively scheduled to bring their report cards home tomorrow, too. The betting is for 3Dfx to post a loss of $0.08 while KLA's mean estimate sits at profit of $0.14.
According to our numbers maven at Fool HQ and the latest information yours truly could locate, below is a tentative calendar of when we can expect some of the other companies in the portfolio to report earnings. Of course, companies change when they actually report at times, thus carving these dates into stone or tattooing them on your arm is not advised.
Iomega October 15 3Dfx October 15 KLA-Tencor October 15 Ma Bell October 20 DuPont October 21 Exxon October 21 Lucent October 22 Amazon October 28 America Online Late October Innovex November 9 Starbucks November 12
Of course, we'll report on the earnings as they roll in right here, and we'll also give the conference call information if and when it is available.
3Com (Nasdaq: COMS) wasn't mentioned here because the company reported earnings last month. 3Com is a bit unique in that its quarter ended at the end of August, not the end of September as most fiscal periods do. For those who missed it, 3Com earned $0.26 in the most recent quarter, a dramatic improvement over the $0.15 loss in the same period of 1997. Trois Coms also posted the best percentage performance of the portfolio's stocks as it bubbled up over the $30 mark again this afternoon before ending the day at $29 1/2.
And now for something completely different... Am I the only one who finds it amazing that it's been almost a year already since the market had its little fender-bender last year? You know, the day where the market's circuit breakers kicked in and caused trading to be halted for part of the afternoon? The time that caused the Sunday night chats Rick Munarriz (TMF Edible) and I host Sundays on AOL to be more an "Asia Watch" chat than anything? No point to be made here, just an interesting observation of how time really does seem to fly when you're having fun.
Finally, for those Fools in the greater San Francisco Bay area, Dave and Tom will be in San Jose, CA tomorrow at the San Jose Convention Center for the National Association of Investment Clubs Congress and Expo. Swing by booth #718 between 2:30 and 3:30 to get your book signed or just to say howdy.
Take it easy, Fools!
- Paul Larson
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Today's FoolWatch: all the latest in Fooldom.
Day Month Year History Annualized FOOL +1.53% -9.32% 29.33% 334.04% 41.94% S&P: +1.07% -1.13% 3.62% 119.36% 20.61% NASDAQ: +2.09% -9.03% -1.87% 113.97% 19.90% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 95.50 2526.20% 9/9/97 580 Amazon.com 19.11 93.50 389.25% 5/17/95 1960 Iomega Cor 1.28 3.63 183.11% 10/1/96 84 LucentTech 23.81 66.75 180.37% 4/30/97 -1170*Trump* 8.47 3.13 63.10% 8/12/96 130 AT&T 39.58 60.25 52.23% 2/20/98 200 Exxon 64.09 74.00 15.46% 2/20/98 215 DuPont 59.83 57.94 -3.17% 2/20/98 270 Int'l Pape 47.69 44.81 -6.04% 8/13/96 250 3Com Corp. 46.86 29.50 -37.05% 8/24/95 130 KLA-Tencor 44.71 27.44 -38.63% 7/2/98 235 Starbucks 55.91 34.25 -38.74% 1/8/98 425 3Dfx 25.67 10.00 -61.04% 6/26/97 325 Innovex 27.71 10.75 -61.20% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 67805.00 $65223.13 9/9/97 580 Amazon.com 11084.24 54230.00 $43145.76 4/30/97 -1170*Trump* -9908.50 -3656.25 $6252.25 5/17/95 1960 Iomega Cor 2509.60 7105.00 $4595.40 10/1/96 84 LucentTech 1999.88 5607.00 $3607.12 8/12/96 130 AT&T 5145.11 7832.50 $2687.39 2/20/98 200 Exxon 12818.00 14800.00 $1982.00 2/20/98 215 DuPont 12864.25 12456.56 -$407.69 2/20/98 270 Int'l Pape 12876.75 12099.38 -$777.38 8/24/95 130 KLA-Tencor 5812.49 3566.88 -$2245.62 8/13/96 250 3Com Corp. 11715.99 7375.00 -$4340.99 7/2/98 235 Starbucks 13138.63 8048.75 -$5089.88 6/26/97 325 Innovex 9005.62 3493.75 -$5511.87 1/8/98 425 3Dfx 10908.63 4250.00 -$6658.63 CASH $12005.75 TOTAL $217019.31