There are two bits of new economic news to tell you about on this Friday the 13th. First, the University of Michigan's Consumer Sentiment Index is indicating Americans' confidence in the future is dipping just a bit after a significant post-Iraq jump.

Also today, the Labor Department's Producer Price Index declined about a third of a percent in May. That index tracks price changes at the wholesale level, which tend to eventually filter down to the retail level.

Mr. Market gathered in all that (and much more) information today, pondered it, and then sent the S&P 500 and Nasdaq down about 1.5%.

Have a great weekend!

In today's Motley Fool Take:

Oracle Needs Less Spin

If Oracle(Nasdaq: ORCL) kingpin Larry Ellison craves attention, he's had his fill this week.

From his $5.1 billion takeover offer for PeopleSoft(Nasdaq: PSFT), to PeopleSoft's less-than-friendly response, to a $1.7 billion lawsuit filed against Oracle by J.D. Edwards(Nasdaq: JDEC) (because J.D.'s acquisition by PeopleSoft has now been put in doubt), to -- capping it all off -- Oracle's quarterly results last night.

Incidentally, results were "better than expected." However, the world's largest enterprise software company reported just slight gains in revenue and (despite its crowing) only very moderate gains in income.

Fourth-quarter sales (ended May 31) totaled $2.8 billion, up from $2.7 billion last year, while net income was $858 million, or $0.16 per share. Oracle touted its net income as a 31% rise over last year's same quarter (it opens its press release celebrating this). In actuality, net income only rose 4% when backing out last year's investment loss on equities.

And its operating income -- a much cleaner look at results -- rose just 3.6%. Additionally, free cash flow for the year rose only 1.4% to $2.89 billion, while net cash provided by operating activities actually declined 3% year-over-year.

The company's press release begs for much more open discussion of financial results, and less spin.

For the year ended May 2003, Oracle's revenue declined 2% on weakness in new software licenses and services, while operating income fell 4%. Its market remains mired.

Meanwhile, the $67 billion giant (based on enterprise value) trades at 23 times free cash flow, making Microsoft(Nasdaq: MSFT), at 15 times free cash flow, a relative bargain.

Oracle offered to buy PeopleSoft at 28 times its free cash flow, which begs a question: Oracle criticizes only one company in its press release, PeopleSoft, saying, "PeopleSoft's... new license revenues [recently] decreased 39%," adding that it's because Oracle is taking away their major clients. So, why be so eager to buy the company? Or did Oracle just want to throw its competitor off its acquisition plan. (Note the lack of a question mark.)

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Adobe Hits Close to Home

It's not a pretty picture. And, no, you can't load it into Photoshop and spruce it up. When Adobe(Nasdaq: ADBE) warned that it would be missing its third-quarter profit targets last night, you may have heard a collective sigh from the dot-com world.

Why? Well, as the publishing software titan goes, so does the world wide web of content. If graphic design artists aren't scooping up copies of Photoshop or web designers upgrading to the latest version of Illustrator, what hope can one have that the general public is ponying up for Acrobat?

To be fair, Adobe isn't missing by much. By projecting earnings to come in between $0.22 and $0.25 a share on less than $315 million in revenue for the August quarter, it marks the smallest of dips, both sequentially and off the company's earlier guidance.

However, a lot of that upside is coming from the recent launch of Adobe Acrobat 6.0. While the stock got slammed in afterhours trading because of weakness in Adobe's other product lines, would it be inappropriate to raise a glass to toast Acrobat and the PDF files it feeds from?

The format has been around for 10 years now. In a wired world where obsolescence hitches rides on freight trains, it's been a growing constant.

If you surf around many corporate sites to dig into your due diligence, you'll find that more and more companies are issuing their financial releases in PDF form. Well, OK, Microsoft(Nasdaq: MSFT) is a natural holdout with its Word-encoded releases, but many of our own FoolMart premium research products require Acrobat -- or the freely distributed Reader software -- to view.

So, take Adobe's slide in stride. The company isn't going anywhere.

It'll miss the current quarter's profit projections by a few pennies, but it also topped the May period by a few token coppers, too. It also has some more software upgrades slated for fourth-quarter releases, and that's the financial bread and butter for Adobe as companies update their wares.

The sky isn't falling. Besides, Photoshop users know how to turn gray skies into blue.

Discussion Board of the Day: Webmaster's Corner

Do you work with the Web? What do you think of Adobe's bad news last night? Do you like its products? Have any tips for your dot-com peers? All this and more -- in the Webmaster's Corner discussion board. Only on

Delphi Slashes Forecast

Friday the 13th turned out to be unlucky for Delphi(NYSE: DPH) shareholders. The auto parts maker slashed its earnings forecast, sending the stock down over 10%.

Management now expects second-quarter net income in the $85 million to $95 million range, a full 50% below previous guidance. In addition, it said revenue and operating cash flow would come in at the low end of its forecast. Full-year 2003 guidance follows a similar path.

Delphi CFO Alan Dawes blames the gloomy outlook on lower production from former parent General Motors(NYSE: GM), a $37 million adverse legal judgment, and the timing of plant closure and layoff expenses.

The company's warning may foreshadow other such troubles within the industry, because Dawes sees no short-term improvement in the automotive market or the global economy. He also forecasted lower North American and European production volume from automakers.

Though GM, Ford(NYSE: F), and DaimlerChrysler(NYSE: DCX) were off only slightly today, other parts makers -- such as Visteon(NYSE: VC), Tenneco Automotive(NYSE: TEN), and Tower Automotive(NYSE: TWR) -- took a bigger hit.

Potential investors should approach this industry with some caution. Toyota(NYSE: TM), Honda(NYSE: HMC), Nissan(Nasdaq: NSANY), and other foreign brands are pushing harder into the lucrative North American light-truck and SUV market. Any significant defections from consumers in that area would squeeze down the already-thin margins of the Big Three.

Quote of Note

"As long as people will accept crap, it will be financially profitable to dispense it." -- Dick Cavett, comedian and television host

Quick Takes

Moody's (NYSE: MCO) cut its credit ratings on automaker General Motors(NYSE: GM) today by one level to Baa1 (a medium-grade rating, not a sheep call). GM's rating had been A3, an upper-medium rating. Pointing to heavy competition, and rapidly rising healthcare and pension costs, Moody's said its long-term outlook for both General Motors and its financing arm, GMAC, is negative.

Betting that Southerners will lap up float-flavored root beer faster than cheese grits, Coca-Cola(NYSE: KO) is launching Barq's Floatz in Mississippi and Louisiana. (For those of you who consider yourselves anything but Southern, a "float" is a soft drink with vanilla ice cream in it. They're mighty tasty.) Barq's root beer was first bottled in Biloxi, Miss., back in 1898, and is the country's top-selling root beer. If Barq's Floatz proves to be a regional success, Coke will likely roll out the product nationwide.

Online discount broker Ameritrade(Nasdaq: AMTD) raised guidance this morning for its fiscal third quarter. Strengthening trading volume has been helping the company's fortunes improve recently. Ameritrade, a member of our Broker Center, now expects Q3 revenues to come in between $173 million and $197 million. Earnings per share will range between $0.09 and $0.11. Analysts had been anticipating earnings of $0.08 and revenues of $153.3 million.

Ever wanted to ride like rap mogul P. Diddy (otherwise known as Puff Daddy, Puffy, or simply Sean Combs)? Now you can. Diddy is slapping his Sean John label on a new line of customized Lincoln Navigators. For a cool $85,000, you can have all the high-tech, shiny necessities a hip-hop star requires: black paint with chrome trim, 22-inch wheels, six TVs, three DVD players, one PlayStation 2, satellite radio, and a heated, vibrating driver's seat. Only 100 of the specialized trucks, which usually sell for $55,000, will be produced, so you'll have to be really ambitious to grab one.

And Finally...

Today on

  • For updated stories throughout the day, bookmark our ever-changing News section.
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  • Powerful Payouts: Many investors still underestimate the power of dividends.
  • Ameritrade Ups the Stakes: Things are looking up for online discount brokers.
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  • In Fool's School, how news affects stock prices.
  • In our Tax Center, new capital gains tax rates.

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