The Nasdaq ascended 2%, but give us a break. Actress and singer Nell Carter passed away of natural causes today at age 54. An Emmy and Tony award winner who performed on stage throughout her career, Carter was best known for starring in the sitcom Gimme a Break! from 1981 to 1987.

In today's Motley Fool Take:

AT&T's Dead Line

When self-dubbed "Papa" Hemingway was trying to decide on a title for his new novel, he was worried that For Whom the Bell Tolls would make people think of Ma Bell, AT&T(NYSE: T). The company had a lot more relevance in 1940. Today, it's surprising that AT&T is still part of the Dow Jones Industrial Average.

The company reported another uninspiring quarter this morning, capping an ugly 2002 during which it completed a 1-for-5 reverse stock split in order to reach a respectable share price. Twenty percent of that share price vanished after it reported an 8.6% decline in fourth-quarter sales, to $9.3 billion. Losses from continued operations were $611 million, more than double the loss in the previous fourth quarter.

Gains from one-time items, including its cable sale to Comcast(Nasdaq: CMCSK), boosted AT&T's fourth-quarter earnings to $516 million, or $0.66 per share. But for all of 2002, revenue fell 10% to $37.8 billion, and the loss posted was $13.1 billion, or more than $17 per share.

Management said that it won't provide forward earnings-per-share guidance anymore (yeah, why bother?), and stated that paying down its $23 billion in debt is "a key goal." It'll start by buying back $4 billion worth of bond debt, taking from its $8 billion in cash. Debt reduction may be good, but at the same time, when it's "a key goal," investors can't expect strong bottom-line results.

Excluding non-cash items, AT&T's free cash flow has been slight to negative each of the past six years, and last year its net change in cash fell by a few billion dollars quarterly as the company paid off debt. Improvements aren't likely anytime soon. This year, sales are expected to decline again. That the company is in this state and still pays a dividend, albeit diminished, could be argued as silly.

Management said that it doesn't foresee a turnaround in telecom spending yet, and that, along with disappointing results from BellSouth(NYSE: BLS), sent telecom stocks reeling again. When it comes to telephone communication in America, we're blessed with too much of a good thing. Individual circumstances aside, logic argues that money in AT&T could be better invested in the S&P 500.

Quote of Note

"Telephone: An invention of the devil which abrogates some of the advantages of making a disagreeable person keep his distance." -- Ambrose Bierce (1842-1914), American journalist

Old and Penniless? Not You!

Note to self: Save for retirement. But first I need to pay that parking ticket and make a vet appointment and, and, and....

Sound familiar? Then how about taking the next five minutes to make sure retirement is the carefree romp that it should be?

Let's do some back-of-the-envelope accounting. Use this Ballpark Estimate worksheet to do some quick math. Guess what? You've started planning your retirement! High five! That's a lot more knowledge than most people have at your tender age.

Looking at the numbers, you may be feeling a little more generous towards your future self. How about upping the contribution to your work retirement plan? Even a few percentage points can make a big difference in the long term. And it's painless in the short term. We swear! Go ahead and increase your 401(k) contribution. (Simply ask your human resources department for the proper contribution change form, or use this pre-prepared one.)

Don't stop now. With visions of retirement dancing in your head, go with the momentum and give your retirement savings a bonus gift. Send an IRA contribution check to your brokerage account for the year 2003. There's a $3,000 limit, but whatever you can afford right now is great. Don't have an IRA set up yet? It's easy to do through a discount broker. What are you waiting for?

Now re-run those cocktail napkin calculations. See? You're already making progress.

Extra credit: Still reading? Huzzah for you! Find out other moves you should make for your golden years -- insurance, housing, asset allocation, and other post 9-5 surprises -- with our How To Plan the Perfect Retirement How-To Guide.

For more detailed directions to achieving the future of your dreams, TMF Money Advisor helps you track, troubleshoot, and even talk to a financial planner as frequently as you need. (Plus all enrollees get free access to all of our retirement seminars.) Ooooh, and guess what? There's a 30-day free trial going on right now. Hop to it!

Have any other financial resolutions to tackle? We can help you get out of debt, spend less, make more, invest smart, and start you on the path to six-pack abs by summertime. Well, three out of four isn't bad.

Shameless Plug: Your No. 1 Resolution

What are your goals for 2003? How about shedding some of that credit card debt with those last 10 pounds, or supersizing your savings account instead of your fries? Well, you've come to the right place, Slim! We'll help you start the year on the right foot, in our New Year's Financial Resolutions Center.

Cisco Suits Up for Fight

Cisco Systems (Nasdaq: CSCO) doesn't play when it comes to matters of intellectual property. The network equipment maker filed suit today against China's Huawei Technologies, alleging that the smaller rival has infringed upon its patents and illegally copied its proprietary software and some of its documentation.

The switches and routers Huawei produces are virtually indistinguishable from Cisco's, causing the Chinese company to be dubbed a "Cisco clone" by some. Huawei and its similarities have been under Cisco's skin for some time now, so the lawsuit isn't surprising. Cisco says it tried to work out its issues with the Chinese company to avoid filing suit, but Huawei wasn't cooperative.

According to Cisco, parts of Huawei's technical documents and user manuals for its Quidway line of routers and switches are word-for-word copies of Cisco documentation. It further claims that its IOS source code -- the operating system for its switches and routers -- has been pirated. Allegedly, Quidway products use whole strings of text and file names that are identical to Cisco's IOS code.

The network equipment maker wants a permanent injunction against Huawei, barring it from selling, distributing, using, or marketing its Quidway routers and switches. Cisco also wants U.K.-based Huawei distributor Spot Distribution to stop selling Quidway products. It's seeking unspecified financial damages for the abuse of its intellectual property.

So, just how big a threat is Huawei to Cisco? Well, as of right now, it's hardly a threat at all, but the possibility of that changing has Cisco worried. Huawei's 2001 sales were only $2.4 billion, with 90% of its business concentrated inside China. However, the company's vocal about its desire to rapidly expand in the West. With prices undercutting Cisco's by 40% to 50%, it doesn't seem far-fetched to think that Huawei could make some inroads.

Discussion Board of the Day: Oracle

Is the software sector finally coming around? What about Oracle? Will it be the next big cash-rich ware titan to roll out a stock dividend? All this and more -- in the Oracle discussion board. Only on

Quick Takes

Big week at the Securities and Exchange Commission. Today, the SEC approved a rule requiring a company's outside legal counsel to inform the company if they suspect fraud. The company must report it to the SEC and put off for another 60 days a proposed rule requiring the outside lawyers to notify the regulatory body. The Commission also approved a rule requiring mutual funds to disclose votes on corporate proxy resolutions.

As expected, McDonald's(NYSE: MCD) posted its first-ever quarterly loss and upped the number of restaurants it will close to 719. Jeff Fischer recently examined its prospects for a turnaround, while Matt Richey covered better-performing Yum Brands(NYSE: YUM).

Shares of No. 1 U.S. health insurer UnitedHealth Group(NYSE: UNH) rose only slightly, despite news that its Q4 EPS grew 53% over last year, attributable to higher premiums. Shares were off 16% from their $101 52-week high.

Lender and credit card issuer MBNA Corp.(NYSE: KRB) announced earnings five cents under Street expectations due to an increase in its reserves for uncollectible debts from consumer lending, as opposed to credit card or operational debts. The company also increased its quarterly dividend by 14%. According to First Call, the company hasn't failed to meet a forecast in 10 years. The stock traded as much as 15% lower, but pulled back to down 7% as trading drew to a close.

Monoclonal antibody drug developer Cambridge Antibody Technology(Nasdaq: CATG) said it would merge with proteomics drug discovery platform company Oxford Glycosciences(Nasdaq: OGSI). You know the U.K. has changed when Cambridge and Oxford marry. Tom Jacobs looks at two other biotech drug makers today in Small Market, Big Profits?

In local news, Jo and Joe Fool announce the birth of their newest Foolette, Janice. She joins brothers José and Joshua and sister Julie. Proud grandparents Jackie and Jerry will stay at the Fool residence until Mom is up and around.

And Finally...

Today on

  • For updated stories throughout the day, be sure to bookmark our ever-changing News section.
  • Tom Jacobs explains why drug companies are fighting over a 5,000-patient worldwide market.
  • Software companies are starting to bounce back. Does it compute?
  • Time, and compound interest, can make a mediocre investor great (and rich).
  • Don't quit your job when you get another offer. You may find yourself out in the cold.
  • In Fool's School, save money on your credit cards.

Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim