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In today's Motley Fool Take:
- Microsoft's Hack Attack
- Quote of Note
- Starbucks Comps on Caffeine High
- TMF Money Advisor
- Disney's Eisner on a Comeback
- Discussion Board of the Day: Disney
- Quick Takes: United Airlines, ChevronTexaco, Ford Motors, more
- And Finally...
Microsoft's Hack Attack
The Department of Homeland Security is warning of an imminent attack -- on your personal computer or your server at work. There is a patch available, but if enough users don't install it, the result could be the fastest-spreading destruction in Internet history.
The problem lies with a security hole in the most popular versions of Microsoft's
Adding to the problem is the breadth of systems affected: Windows NT 4.0, Windows NT 4.0 Terminal Services Edition, Windows 2000, Windows XP, and Windows Server 2003.
Aside from the fact that Windows XP has been "shipping on essentially every home computer sold in the last 12-18 months," Brown says, the vulnerability also affects every server running Microsoft operating systems -- "which is the sizeable majority of all server systems in production."
Aside from other destruction, all of this means hackers could release a virus or worm that has the potential to spread faster than the recent "CodeRed" worm.
Homeland Security officials expect a wide-scale attack any day now because of "an Internet-wide increase in scanning for vulnerable computers over the past several days." If you're a computer owner or administrator running the software in question, you can update your Windows operating system by visiting this link. Doing so will eliminate this particular vulnerability.
Quote of Note
"The issue comes down to 'stewardship versus salesmanship'... You have to overrule your idea to make a lot of money and make a lot of managers rich." -- John Bogle, Vanguard founder, on the mutual fund industry
Starbucks Comps on Caffeine High
For the four weeks ended July 27, sales at the world's largest coffee purveyor increased 23% to $322 million. Most impressively, Starbucks reported 9% comp store sales growth, continuing a string of high-single-digit monthly comp growth performances that have persisted all year.
Last week, in Starbucks' third-quarter earnings release, the company said to expect comp store sales to be "at or above the high end of the 3%-7% target range for the remainder of the year." So, at 9%, July's growth was meaningfully above official expectations.
So what's driving sales, you ask? Our best guess is the new malt-flavored Frappuccinos (our recommendation: the Mocha Malt). In all seriousness, the highly successful Starbucks card may be partly responsible. Whatever the catalyst is, it's not higher prices (as you might expect). Management made a point in last week's earnings release of saying that comp store sales are rising on the strength of increased store traffic, plain and simple.
But don't be surprised if the market's reaction today is only modestly enthusiastic. Starbucks is practically a victim of its own success considering that this high level of comp growth has been so persistent for so long. Since January 2002, Starbucks' monthly comps have increased at a rate no less than 6%.
This consistent operational growth has finally, of late, pushed Starbucks shares to an all-time high of $27.77. At that price, the company is valued at $11.1 billion, or 41 times expected current fiscal year (ending in September) EPS of $0.67. That price appears pretty fully valued, but then again, Starbucks has often looked that way over the years.
TMF Money Advisor
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Disney's Eisner on a Comeback
CEO Michael Eisner is no longer on the hot seat. It's more of a lukewarm tingle now that Disney
Over the past few years, Disney had seen its empire start to crumble. How could the same charismatic chief who returned the company to prominence in the 1980s and early 1990s get into this mess? Its ABC network went from first to a fourth place finish over the past two years. Attendance at the company's signature theme parks started to suffer. Its in-house animation studio was being outdrawn by outsiders. Its Disney Store format had grown tiresome to suburban mallrats.
Although Disney was quick to point to soft trends in tourism and weakness in the advertising market for its problems, it's clear it just wasn't keeping pace with the competition.
While last night's report shows that the company's still got some Swiss-style holes in Mickey's cheese, you can probably call off the Main Street U.S.A. effigy burnings of Eisner plush dolls. Disney's back. Well, at least it's starting to come back.
The fact that earnings rose by 10% to $400 million while Wall Street was looking for a slide in profits is sweet. Growing the top line by 6% for a $6.2 billion showing was even sweeter. How so? Well, because Disney's cost-cutting initiatives have done their part to improve margins, many figured that Disney was too focused on streamlining its operations to actually grow revenues. Disney scored the best of both small worlds this time.
Strength at the box office, along with signs of health in the advertising market, helped its studio and broadcasting divisions during the June quarter. Even though the company is still struggling in its theme park business and has resorted to deep discounts to get the turnstiles clicking, Cedar Fair
Disney finally sold off its Anaheim Angels baseball franchise. Oddly enough, Eisner may well be on his way to getting his halo back.
Discussion Board of the Day: Disney
Do you really think that Disney CEO Michael Eisner has won back the confidence of its shareholders? Is Disney's turnaround finally under way? Can you really buy Eisner plush dolls? All this and more -- in the Disney discussion board. Only on Fool.com.
Not yet a member of the Fool Community? Jump into our discussion boards free for 30 days!
UAL, the bankrupt parent of United Airlines, reported a huge quarterly loss today, on revenues that nose-dived 18%. Including the federal government's reimbursement for increased security expenses, UAL lost $623 million, or $6.26 a share. The airline lost $341 million, or $6.08 a share, in last year's second quarter. Revenues dropped to $3.1 billion. The company hopes to reemerge from bankruptcy later this year or early next year.
Oil company ChevronTexaco's
The recall election in California got more interesting today. Larry Flynt, infamous free speech advocate and founder of Hustler magazine, filed initial papers to run in the special gubernatorial election. Pundits have at times likened politicians to prostitutes, so why not have a pornographer in office? Flynt said, "California is the most progressive state in the union. I don't think anyone here will have a problem with a smut peddler as governor."
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Four Big-Bottomed Stocks: Cash-rich companies provide downside protection. We look at four stocks with big bottoms.
- Nothing Like Public Humiliation: Expeditors International tells an analyst exactly what it thinks. In an SEC filing.
- In Our Tax Center, midyear tax planning.
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