Financial pundits set a new world record this morning by using the same explanation for the market's behavior for the 58th straight day: "Stocks Dip on Security, War Fears." Yes, Fools, worry over Iraq had driven the S&P 500 down a stunning one-half of one percent by mid-morning.
In one Wall Street office, a panicked trader expended three seconds of thought on the issue. In Iowa, a harried restaurant manager ordered more produce and had part of another day's pay diverted into her 401(k).
The threat of war has been hanging over our heads for months. We -- participants in the U.S. stock market -- long ago calculated what it means for our investments, and reacted accordingly. We are not re-reacting every single day of every single week over the same, unchanging issue.
And so we say to Reuters, Associated Press, The Wall Street Journal, Bloomberg, and so on... enough! Give us a factual headline, like: "Some Stocks Inched Down Today For No One Single Reason, It Just Happened That Way."
The FOOL 50, stunned that Celtics forward Vin Baker missed a game because of "lightheadedness," plunged a terrifying 1%.
In today's Motley Fool Take:
- Coke Loses Fizz
- Quote of Note
- There's Cash in Your Closet
- Shameless Plug: Save for the Unexpected
- Applied Materials' Dark Times
- Discussion Board of the Day: Discount Brokers
- Quick Takes: Berkshire Hathaway, Viacom, Cox Communications , more
- And Finally...
One was total revenue, which rose 11.5% for the year to $19.6 billion and 13% in the quarter to $4.8 billion. Worldwide unit case volume, an important measure of strength, improved 5% for all of 2002 and 6% for the quarter.
Coke owes some of that growth to its acquisitions and licensing agreements for Evian and Danone waters and Seagram's mixers. Without them, volume would have grown by 4% in the quarter and 4.5% for the year. New products Vanilla Coke and Diet Coke with Lemon also helped volume.
Net earnings were hit, in part, by Coke's commendable decision to expense stock options, as well as the Financial Accounting Standards Board's change in goodwill accounting standards. On an annual basis, income dropped 23% to $3.1 billion. Operating income, though, inched up to $5.5 billion from 2001's $5.4 billion.
Coke grew free cash flow an impressive 16% to $3.9 billion. The company spent some of that moolah -- $691 million, to be exact -- on stock repurchases in 2002, and plans to do more of the same in 2003.
To further cut costs and improve efficiency, Coke will close three German bottling plants and reduce staff there by 900 employees. In North America, its cutting 1,000 jobs and combining operations at Coca-Cola North America, Minute Maid, and Fountain. The company will take a $400 million pretax charge because of these initiatives in 2003, with the bulk of the charge falling in the first half of the year.
Coke's now trading at half of its 1998 peak, but at a trailing price to free cash flow of 25, the company's still not a bargain.
"Money is a powerful aphrodisiac. But flowers work almost as well." -- Robert A. Heinlein (1907-1988), American author
Stop avoiding your messy closet. That pile of clothes you'll probably never wear again represents cold, hard cash.
How? You can donate unwanted items to charity and generate a tax deduction for yourself. (Of course, items donated now, in 2003, will represent savings on your 2003 tax return, not the 2002 return you're working on now. Still, it's worth doing now. Begin reducing your upcoming taxes, while making room in your closets and basement.)
Here's how it generally works (though as with all things tax-ish, there are always rules and limitations). Collect your castoff clothes (and computer equipment, clothes, toys, and furniture), and catalog everything on paper -- by type, condition, and quantity. Get a fair estimate of their values (and realize it may not be close to what you paid for them), and sum it all up. Let's say the total is $800. If you're in the 27% tax bracket and can deduct this amount, you'll save $216 -- not bad, eh? If you donate $2,000 of stuff (which might be surprisingly easy to do) and are in the 30% tax bracket, you'll save a whopping $600! Don't simply guess their current fair value, though. Guess too high, and you run the risk of ticking off Uncle Sam, should he come snooping. Guess too low, and you're leaving money on the table.
A little research can pay off. One useful resource, ItsDeductible.com, offers (for $30) to help you get the most for your stuff. Here's one article from its website, summarizing this topic. For more information, check out this selection of IRS documents, which covers various deductions. Also, as you prepare your 2002 tax return, check out our friendly Motley Fool Tax Guide 2002, which aims to help you make smart tax decisions throughout each year. You could save thousands of dollars with these tax tips. Finally, pop over to our Tax Strategies Center, where our diligent TMF Taxes has prepared many informative articles for you.
Here at Fool.com, we spend a lot of time talking about investing in the stock market. But that's for your long-term savings -- money you won't need for at least five years, right? Right! What about those unpredictable zingers life throws at you at the worst times? Why, that's why you need a stash of short-term savings. Let us tell you how to start saving today.
The semiconductor equipment maker warned the market at the end of January that its orders for the quarter would be far lower than anticipated.
Lower indeed, coming in 35% below fourth-quarter levels to $1.02 billion. Orders can be a good way to track and predict future revenue for a company like Applied Materials. For the second quarter, it expects orders to increase sequentially, but it still doesn't see a business upswing anytime soon.
Revenues reached $1.05 billion, ahead of last year's $1 billion. The company lost $66 million, or $0.04 a share, counting a $99 million restructuring charge. In the previous first quarter, it lost $45 million, or $0.03 a share. Excluding the charge, it made $6 million and broke even on a per-share basis.
Looking ahead, Applied Materials sees more of the same. Weak business spending and an uncertain political and economic environment will continue to inflict pain. It predicts Q2 sales will rise slightly, and hopes to earn between $0.01 and $0.02 a share. The company also said it can't rule out further cost cutting if business conditions fail to improve.
For shareholders, who've seen shares drop from a 52-week high of $27.95 to the current $12 level, things don't look to be getting brighter anytime soon.
Have you checked out our Broker Center lately? New deals. New comparison tables. Plus, fellow Fools share their broker experiences. Who's doing it right? Who's getting tripped up? Does last night's news indicate discount brokers are bouncing back? All this and more -- in the Discount Brokers discussion board. Only on Fool.com.
Alan Greenspan caused a bit of consternation for the White House today. The Fed chairman told Congress there's no need for a short-term economic stimulus package, and expressed concern over President Bush's proposal to cut taxes and increase the deficit. Mr. Greenspan did approve of ending the double taxation of dividends, however, saying it made long-term sense.
Berkshire Billionaire Buffett Buys Bankrupt Burlington: Berkshire Hathaway
In earnings news, entertainment and media conglomerate Viacom
In local news, Sam and Wanda McCaffey have decided to keep their dog Barfy indoors from now on. "He just wouldn't stop chasing parked cars," said Wanda. "He's broken his nose three times already, and the vet bills were just too much."
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Zeke Ashton wonders if Johnson & Johnson's $2.4 billion deal to acquire Scios will pay off.
- Are discount brokers bouncing back? Subtle signs point to a recovery.
- A new study finds college costs skyrocketing and financial aid shrinking. Read more.
- Rick Munarriz says to commemorate Abe Lincoln's birthday by emancipating yourself from these one-cent gambles.
- In Fool's School, cars depreciate faster than you think.
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