We've weighed in on the absurdity of the global razorblade arms race. But what's the connection between razors and batteries? Today, Rayovac(NYSE: ROV) agreed to acquire Remington in an all-cash deal valued at more than $300 million. In March, Energizer scooped up Schick from Pfizer(NYSE: PFE), and everybody knows that Gillette(NYSE: G) manufactures Duracell.

What's the connection? We're pretty sure it's got something to do with distribution channels and shelf space. But if we see the Diehard guys snooping around our medicine cabinets, we'll let you know.

In today's Motley Fool Take:

Intel Rocks the Chips

Semiconductor giant Intel(Nasdaq: INTC) rocked the computer chip sector higher this morning after revising third-quarter guidance significantly upward. The company said that while the outlook for communication equipment and the rest of its business remains unchanged, computer processor sales have begun to accelerate and will exceed earlier guidance.

Intel now expects third-quarter sales to range from $7.3 billion to $7.8 billion, compared to earlier forecasts of only $6.9 billion to $7.5 billion, and up strongly from last year's $6.5 billion. Management also increased gross margin guidance by two points, to 56%, plus or minus a few points. The high end of that range represents a level not seen in three years.

The news buoyed others in the chip market, including equipment leader Applied Materials(Nasdaq: AMAT), chief competitor Advance Micro Devices(NYSE: AMD), Lam Research(Nasdaq: LRCX), Atmel(Nasdaq: ATML), and Arm Holdings(Nasdaq: ARMHY). Outside chips, PC leader Dell Computer(Nasdaq: DELL) also rose.

Despite recent gains, many semiconductor stocks are still near multi-year lows, a result of a cyclical industry having just suffered its worst three-year downturn in two decades. Investors applauded Intel's news as sign of a possible turnaround for Intel, the chip sector, and, perhaps, the larger tech economy. If Intel's upbeat forecast does herald a recovery, investors may want to reconsider any bets they've placed against the chip industry. Cyclical upswings can be dramatic and often last at least a few years.

Looking ahead, Intel was previously expected to earn $7.8 billion in fourth-quarter sales, a number that will almost surely need to be bumped up. For the year, its $0.69 in consensus earnings-per-share estimates may rise to at least $0.74 per share. The $28 stock is at 40 times the existing estimate and 25 times trailing free cash flow, in line with the S&P 500's free cash flow multiple. Although pricey-looking, if better times are ahead, the stock could keep rising on arguments that its valuation will become justified as earnings expand.

Quote of Note

"I hope life isn't a big joke, because I don't get it. " -- Jack Handey

Giving Gap Its Due

By LouAnn Lofton (TMF Bling)

I've got to give it up for Gap(NYSE: GPS). As a shareholder who's skeptical about the specialty retailer's recovery, I was expecting less-than-thrilling second-quarter results.

Sure, I figured sales and earnings would be up. Having fallen so far by this time last year, that would be easy. Same-store sales would also eclipse the dismal results of recent years, but how would things measure up elsewhere? And would any of this really signal progress?

What I saw surprised me. The quarter really was strong, and Gap does seem to be making its way back to good health.

Now, I have to admit I'm not a full-fledged believer yet. The third quarter will tell the tale. After all, it was in the third quarter last year that Gap began inching its way out of the hole, and comparisons get tougher as we move into the crucial back-to-school season and beyond. Only then can Gap justify a move from $8.35 to around $19 per share in less than a year.

Since I can't predict the future, and since third-quarter results are still a ways off, let's look at what we can see. I mean, there's no reason not to celebrate the company's solid Q2 results.

Total revenues for the quarter increased 13% to $3.7 billion on a 10% jump in same-store sales (though admittedly, that's coming off last year's 7% drop and the second-quarter 2001's decline of 9%).

Net income, meanwhile, more than tripled to $209 million from $57 million. In fact, Gap earned more in this one quarter than it did in the first two quarters combined in each of the past two years. Earnings per diluted share came in at $0.22 versus $0.06.

The cash flow statement also looks good. Capital expenditures declined 40%, and the business generated $235 million in free cash flow through the first six months of the year.

Gap's fashion mix continues to resonate with customers, and because it's discounting less, gross margins improved to 36% from 33%. Inventories increased a respectable 9%, while total debt stayed roughly the same. Moving into the third quarter, Gap looks to be in good shape, operationally lean and strong, and headed (finally) in the right direction.

Can Gap pull off another outstanding quarter of growth? I certainly hope so. Until I know for sure, you can bet I'll be watching the monthly same-store sales reports and monitoring the new fall fashions filling its stores.

As mentioned above, LouAnn Lofton owns shares of Gap.

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Et Tu TiVo?

Whether you follow the company or not, you have to admit that TiVo's(Nasdaq: TIVO) got a pretty cool product. A digital video recorder that can pause live TV comes in awfully handy when nature or your mother-in-law calls. But investors know better than to get too excited over the low-margin world of home-entertainment hardware.

That's why the real gravy for TiVo is its budding subscriber service. TiVo truly struts its killer-app stuff with its ability to download localized programming and then record shows you like -- and even shows it thinks you might like based on the shows you like.

So investors might forgive TiVo for posting a wider second-quarter loss last night, given that the company landed another 90,000 subscribers and plans to top the million-user mark over the holidays. That's the scalable sweet spot right there, folks. Forget the hardware, beyond the fact that it facilitates the service revenue. Just $8.1 million of the company's $26.7 million in revenue this past quarter came from hardware sales.

TiVo has learned to let others do the dirty work of getting enabled devices into homes. In addition to the Hughes(NYSE: GMH) DirecTV-TiVo systems that are already selling briskly thanks to a big marketing push from Hughes, Pioneer(NYSE: PIO) and Toshiba are rolling out DVD players with TiVo recorders. All told, holiday shoppers should have 10 different TiVo-related products to choose from later this year.

Last week, our own Lou Lofton pitted TiVo against Netflix(Nasdaq: NFLX) in a classic duel. Always open to the possibility of a win-win, David Gardner recommended both -- first Netflix, then TiVo -- to subscribers in Motley Fool Stock Advisor.

And for all their differences, both climb the same wall of worry toward (and, in the case of Netflix, beyond) the million-subscriber mark. Netflix is now profitable, and while TiVo expects to post another loss here in the third quarter, high-margin subscriber growth has a way of kick-starting the bottom line.

TiVo wouldn't mind following Netflix into market-darling land. When it does, it might just be tempted to hit pause and savor the moment.

Discussion Board of the Day: TiVo

Have a TiVo testimonial to share? Is it really a television-viewing revolution or are digital video recorders overrated? Will TiVo rise and kiss the single digits goodbye -- forever? All this and more -- in the TiVo discussion board. Only on Fool.com.

Quick Takes

Shares of Schering-Plough(NYSE: SGP) were sheared 10% today after the company said it would be cutting 1,000 jobs and slashing its dividend from $0.17 to $0.055. As if that weren't enough, the former pharma phenom also issued an earnings warning for the rest of this year and 2004.

The Office of Federal Housing Enterprise Oversight, the agency that regulates Freddie Mac(NYSE: FRE), is reportedly recommending the ouster of new Freddie CEO Gregory Parseghian. Freddie Mac admitted to discussing the situation, but said any "speculation as to the nature or timing of resolving OFHEO's concerns is absolutely premature." Parseghian was the company's chief investment officer during the recent accounting scandal.

DaimlerChrysler (NYSE: DCX) agreed to pay $300 million to settle a lawsuit brought by disgruntled former shareholders. The investors were peeved that the merger with Chrysler, which was billed as a "merger of equals," amounted to nothing more than a takeover. The company vows to fight any other such lawsuits, including a current one from Kirk Kerkorian, who owned 13% of Chrysler before the acquisition. The trouble stems from a Financial Times interview in which Daimler CEO Juergen Schrempp said, "If I had gone and said Chrysler would be a division, everybody on their side would have said: 'There is no way we'll do a deal.'''

In local news, auto mechanic Jonathan Charles said, "Some people just don't know when to keep their mouth shut."

And Finally...

Today on Fool.com: Bill Mann begs the stock options question.... Great ideas, like investments, don't always sound so great at first. Unless you're into fried Twinkies.... Whitney Tilson has investing lessons from Michael Lewis' Moneyball.... In our Tax Center, should you borrow money to buy dividend-paying stocks?

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