The check is in the mail.
Tomorrow, the first batch of tax credit checks go out to parents across America. The Jobs and Growth Tax Relief Reconciliation Act of 2003 increased the federal child-care tax credit to $1,000 from $600 for each kid you're still saddled with. So, each of your little terrors will be worth another $400 to you, to be mailed out July 25, Aug. 1, or Aug. 9, depending on your Social Security number.
Go out and jumpstart the economy. Buy yourself something nice. Or buy yourself something that will make you more money in the long run, like Tom Gardner's Motley Fool Hidden Gems newsletter. Or, the heck with helping the economy. Just put the cash in an index fund and let it grow undisturbed to $8,000 in 30 years.
In today's Motley Fool Take:
- Lucent's Unlucky 13
- Should You Refinance?
- Budweiser's Still the King
- Quote of Note
- Jobless Claims Down, But...
- Discussion Board of the Day: Video & PC
- Quick Takes: Bristol-Myers Squibb, Eli Lilly, AT&T, more
- And Finally...
Lucent's Unlucky 13
That takes some faith. Management has a tough challenge. It's not just the telecom capital-spending debacle that has devastated this company, but some of the worst financial (and other) management we've seen at a company that didn't go bankrupt.
But it is only natural that where there is disaster, astute investors wonder if there is opportunity. Let's look at some highlights of the five quarters since the Agere
Cash Total Cash & Equiv. Debt* Burn** Quarter (all $ bils.) June 2003 $4.93 $6.87 $(0.326) Mar 2003 $3.44 $5.28 $(0.897) Dec 2002 $3.74 $6.50 $(0.928) Sept 2002 $4.42 $6.30 $ 0.408 June 2002 $5.42 $6.83 $(0.143) *Short term + long term + preferred stock
** Net cash from operations - capital expenditures
(No adjustment for depreciation, amortization, or interest earned.)
Total SG&A* Revenues Gross as % of Quarter ($ bil.) Margins Revenues June 2003 $1.97 29% 21% Mar 2003 $2.40 32% 20% Dec 2002 $2.08 22% 19% Sept 2002 $2.28 (15%) 43% June 2002 $2.95 22% 30% *Selling, general and administrative expenses
Lucent is weighed down by more debt than cash, a trailing-12-month cash burn of $1.7 billion, and flat-to-declining revenues. Cost-cutting measures that initially showed results appear to have run out of benefits. While a positive, the just-announced $1 billion contract from Sprint PCS
Some corporate governance praise: For five quarters, the releases accompanying Lucent's quarterly earnings have ranked at the top for financial disclosure. While in theory what matters is the actual 10-Q filed with the SEC, the reality is that the financial media report and investors rely on the info in press releases. Lucent provides all three financial statements plus all sorts of extra data. Folks, they even break out the quarterly cash flow. Few companies can be bothered to cough up cash-flow statements in their releases, much less offer each quarter's numbers in addition to the standard cumulative figures that appear in 10-Qs. Very classy, Lucent.
Great as it is that the management team appears committed to transparency, right now the sun shines squarely on continued operational weakness. So if you find yourself tempted to invest, here are two bits of advice: Make sure you're comfortable with speculation and catch Chuck Saletta's must-read analysis on our Lucent discussion board. You'll be glad you did.
Should You Refinance?
Refinancing can mean big savings. We can help you decide if it's right for you. You're welcome to drop by our Home Center 24/7.
Budweiser's Still the King
Once again, Anheuser-Busch
The company posted second-quarter earnings of $0.75 per share yesterday, up 14% year over year. Top-line revenue grew 4%, while both gross and operating margins also increased.
CEO Patrick Stokes told investors he's confident of achieving consistent double-digit earnings growth over the long term. That's a tough objective, but one of the reasons he must be taken seriously is the power of Anheuser-Busch's brands. Names like Budweiser, Bud Light, Michelob, Busch, and Bacardi have extremely loyal customers.
That loyalty will allow management to institute another price increase later this year "tailored to specific markets, brands and packages." Few companies enjoy that kind of pricing power, especially in a down economy.
Fellow brewer Adolph Coors'
For now, at least, the King of Beers is worthy of its name.
Quote of Note
"Ah, beer, my one weakness. My Achilles' heel, if you will." -- Homer Simpson
Jobless Claims Down, But...
Besides profits and dead Husseins, what does the market really love?
Which is one reason why stocks put on a happy face today. The Labor Department announced that weekly jobless claims plunged by 29,000 to 386,000 in July. That's the lowest in five months and below that magic 400,000 mark economists cite as the sign of a weak labor market.
But don't get too excited. The Labor Department also noted that seasonal hiring and firing by manufacturers make July an especially volatile month for employment figures. Moreover, today's numbers are an indication of how many people filed for unemployment benefits. In other words, fewer people were fired -- but that doesn't mean more people were, or will be, hired.
Finally, there's the question of whether some of the jobs lost over the past few years will ever return. More and more, companies are outsourcing work to foreign countries, and not just manufacturers. Call centers, information technology, and financial analysis are just some of the work moving overseas.
A recent CNN/Money article described how a Microsoft
What's a Fool to do? Be prepared.
The possibility of losing one's job is the No. 1 reason everyone should establish an emergency fund. The standard recommendation is six months' worth of expenses in a readily accessible, safe place such as a money market account. (You can learn more about where to stash your emergency cash at our Savings Center.) If something should happen to your paycheck, you'll want to be able to cover your bills with something other than a credit card or premature withdrawals from your 401(k).
Meanwhile, if you're curious whether your job is on the bubble, take Fortune's "How Safe Is My Job?" quiz.
Discussion Board of the Day: Video & PC
Electronic Arts' playability should keep gamers and shareholders happy for years to come. How has EA managed to grow while leaving its rivals behind? Are the accounting allegations against some of the company's peers valid? What video kids will kids be craving over the holidays this year? All this and more -- in the Video & PC discussion board. Only on Fool.com.
Drug maker Bristol-Myers Squibb
Competing big pharma Eli Lilly
Mega-insurer American International Group
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Why I Like iPayment: A newcomer charges ahead in a strong business -- credit cards.
- A Low-Risk 6% Yield: Matt Richey hones in on Tupperware, a steady profit generator with a fantastic yield.
- In Fool's School, insurance resources galore.
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim