Today's the day you've been waiting for. You can finally dump your cell phone company, choose another one, and keep your old number. But before you make a hasty decision, you might check out our Fool's guide to Navigating Wireless Portability. Also today, it's not exactly Dueling Fools, but Vanilla Coke and Pepsi Vanilla are slugging it out in a battle for your taste buds.
In today's Motley Fool Take:
- The Price of Portability
- Discussion Board of the Day: Living Below Your Means
- Xerox Looks Ahead
- Quote of Note
- Glaxo's Patent Problems
- Shameless Plug: Where's Your Best Investment?
- More Fool News
- And Finally...
The Price of Portability
If you woke up this morning to the sound of unearthly chatter, it was probably just wireless service providers chewing their nails. Yes, Nov. 24 has arrived, and with it, mobile number portability. Hate your cell phone service -- or rates -- but stuck around just because everyone had your wireless number on speed dial? Your prayers have been answered.
The cellular emancipation couldn't come at a worse time for the companies. Shares of AT&T Wireless
While you are sure to hear horror stories in the coming days about folks going days without wireless service during the transition or that there is really no service provider out there with an immaculate record, the sector will be tested.
The saving grace for these companies is that the very dynamics of portability might be beneficial in the long run. Contract terminations fees are likely to rise. Those great deals on Nokia
The providers will learn to profit from the churn. If not, there will be a shakeout and those left behind will be in a better position with larger chunks of market share and more leeway to dictate pricing.
Cellular service providers aren't fading away. Verizon Wireless -- a joint venture between Verizon
Wireless number portability won't be painless, but it just may just be the eye-opener the industry needs to evolve into a sector that will fundamentally connect with its consumers -- and its investors, too.
Discussion Board of the Day: Living Below Your Means
Think that portability will be a great way to lower your costs by switching to a more attractive pricing plan? Want to learn about even more ways to shave some of your overhead while spending less than you earn? All this and more in the Living Below Your Means discussion board. Only on Fool.com.
Xerox Looks Ahead
How the mighty can fall. But will this giant rise again?
In an analyst conference call this morning, Xerox's CEO Anne Mulcahy said she's pleased with the company's market opportunities, but provided 2004 guidance slightly below analysts' expectations. Whether the blame is on Xerox or on optimistic analysts is irrelevant. Disappointment on Wall Street ensued and the media focused on the black eye rather than the half-smile beneath it.
For next year, Xerox projected earnings per share of $0.67 to $0.72. The consensus analyst estimate was $0.73 or $0.74 (depending on your source). For 2005, the company projected strong earnings growth, rising to a range of $0.90 to $1.00 per share, on 5% sales growth. Sales are down modestly this year and expected to be flat in 2004.
Mulcahy said the company has ample growth opportunities, so the focus is on execution and paying down debt. Xerox has $11.8 billion in long-term debt. It should pay it down to $11 billion by year-end, and will keep paying it. Free cash flow is making this easier. Management expects $1.5 billion in free cash flow this year. That puts the company's enterprise value, at $10 per share, at about 11 times expected free cash flow.
Competitors such as Hewlett-Packard
Xerox is a faded giant with improving financials, a situation that turnaround-interested investors might find attractive. Unfortunately, it doesn't offer a dividend while you wait, but at 14 times 2004's expected earnings and nearly 10 times 2005's guess, the stock could provide appreciation of around 50% over the next two years if management executes.
Quote of Note
"Don't part with your illusions. When they are gone you may still exist, but you have ceased to live." -- Mark Twain
Glaxo's Patent Problems
"Copycat" may have been an unflattering taunt in childhood, but when it comes to drug companies, copycats are more than just a minor annoyance. GlaxoSmithKline
A lower court had already ruled against Glaxo's Augmentin patent, leaving the company open to generic competition from Geneva Pharmaceuticals, Teva Pharmaceutical Industries
Generic competition is hardly unusual in the world of big pharma. Companies with blockbuster drugs that face patent expiration generally find a new application or more convenient dosage schedule, sometimes even a new name and marketing angle, in order to preserve revenues and give new life to an endangered drug. For example, Glaxo also has Augmentin ES and XR in its pharmaceutical lineup, which represent 35% of all prescriptions written for Augmentin, both branded and generic.
Back in September, a generic version of Paxil, one of Glaxo's most popular drugs, launched the company into another patent dispute.
Another of Glaxo's high-profile drugs that could face increased competition is Levitra, a drug for erectile dysfunction co-launched with Bayer
On Friday came word of the Food and Drug Administration approval and imminent launch of yet another impotence drug, Cialis, masterminded by Eli Lilly
Much like Merck
Shameless Plug: Where's Your Best Investment?
Get the skills you need to be a confident and profitable lifelong investor. Our new Personal Coaching System gives you access to an experienced professional investment coach.
More Fool News
- Warner Music to Bronfman
- The Real Tech Gold
- The Next High-Tech Acronym
- Munching Numbers
- Antigenics Rises
For a list of all our stories from today, see Today's Headlines.
Today on Fool.com, interested in a federally tax-free yield of almost 7%? If so, here's why Munis Aren't Just for the Wealthy.... In The Kellogg Competition, CEO Carlos Gutierrez talks about private-label brands and other barriers to growth.
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Jeff Hwang, Tom Jacobs, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Reggie Santiago, Dayana Yochim