Oil pushed toward $41 a barrel today -- after closing above $40 per barrel for the first time in 13 years yesterday. Analysts are pegging the average price for a gallon of gasoline to reach between $2.07 and $2.40 in many states this summer. It's just enough to make you want to pack up the kids in the station wagon and head cross-country, isn't it?

In today's Motley Fool Take:

Tw ice Shy at Cisco?

By Bill Mann (TMF Otter)

Cisco's (Nasdaq: CSCO) quarterly report looks absolutely brilliant. Massive gains in earnings, increasing sales, $2.4 billion in operating cash flows, and muscular 70%-plus gross margins are everything you'd want to see from one of the world's great companies.

And yet... Cisco's stock got smacked after hours once it reported and is 4% lower in trading today. Far be it for us to care about short-term moves, but since you didn't ask, we have a theory or three about this very thing. Let's call them the three wormholes.

  • Wormhole #1 Inventories skyrocketed over last quarter to well over $1.1 billion, a gain of nearly 20% from the previous quarter. Although John Chambers, Cisco's CEO, noted that this could happen, longer-term investors in the company remember all too well the sudden writedown of more than $2.2 billion in inventory in 2001. Two things to note here. First, if Cisco is currently producing too much gear, then why in the world is the company hiring? And second, even though the company did state that the rise in inventory was no big deal, this doesn't exactly jibe with their projected growth of 3%-5% for the remainder of the year.

  • Wormhole #2 Cisco reports that it has bought back more than $7 billion in stock over the last nine months -- though over the last year, the company's total share count has only dropped by 246 million if you take the basic share count, or 82 million going by the diluted count. Of course, since the stock is higher than it was a year ago, more options are going to be in the money, but even on a basic-share basis, that means that each net share decrease in the share count cost of $28 of shareholder equity, and that number balloons to over $85 per stub using the diluted number. That's the impact to shareholder equity for companies that issue enormous amount of options.

  • Wormhole #3 This one's quite simple. Take a good look at these results, and then take a good look at Cisco's share price. The shares had already taken these exact results into account, maybe even more so. Dynamite earnings don't mean much when they're anticipated. Those who were most optimistic didn't get the shouting from the rooftops they had hoped for in their heart of hearts, while for everyone else, these results were like the arrival of a cigar box purse you won on eBay(Nasdaq: EBAY): bought, paid for, and as advertised. You do notice that there's a little thread loose, but ideally that won't cause the whole thing to fall apart.

Bill Mann owns none of the companies mentioned in this story.

Sh ameless Plug: TMF Credit Center

Credit can be your best friend or your worst nightmare. So the bogeyman pays you a visit every night, eh? Now is the time to face down that ghoulish spectacle otherwise known as your credit. Don't worry, we've got your back! Visit the TMF Credit Center, and learn how to make credit work for you. We bet you'll also sleep better at night.

CarMax Downshifts

By Phil Wohl

It has not come as a surprise that interest rates have been inching up slowly and gas prices have shot through the roof. What was surprising today was CarMax(NYSE: KMX)reducing its guidance for its first quarter.

CarMax's announcement that comparable stores sales are expected to decline 2-4%, from the previous estimate of 1-3% growth, effectively slammed the brakes on a positive quarter and even shifted the company into reverse. The nation's leading specialty retailer of used cars also lowered its guidance on first-quarter earnings from a range of $0.33 to $0.35 per share, to $0.30 to $0.32 per share.

The company also made a sobering revelation that it believes the softness appears to be market-wide, not just company-specific. The fact that CarMax continues to gain market share most probably backs up its industry decline claim.

An industry-wide shortfall also signals corporate engine problems for a number of companies including car dealership group AutoNation(NYSE: AN), which despite estimate-topping first-quarter earnings recently lowered its EPS guidance for the second quarter.

Will CarMax's chilly outlook have a negative impact and trickle down to companies such as UnitedAuto Group(NYSE: UAG), Pep Boys(NYSE: PBY), and AutoZone(NYSE: AZO)? Will the news have a similar impact on major carmakers DaimlerChrysler(NYSE: DCX), General Motors(NYSE: GM), Toyota(NYSE: TM), and Ford(NYSE: F)?

The answer isn't simple, but car sales have historically been negatively affected by rising interest rates and climbing gas prices. Consumers are likely to turn to cars that get tremendous gas mileage and look for hybrid cars like the "Hollywood It Car" Toyota Prius.

It's often disturbing when companies try to avoid looking in the mirror and instead deflect some of their shortfalls on other companies. I see CarMax's downbeat announcement as both a company flaw and an impending industry issue. It's time to roll down the windows and look around the industry for tire leaks.

Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.

Qu ote of Note

"Depend not on fortune, but on conduct." -- Publilius Syrus

Si rius Business

By Rick Aristotle Munarriz (TMF Edible)

It's not always easy being Sirius(Nasdaq: SIRI). Last night, the satellite radio upstart announced that it had surpassed the 400,000-subscriber mark. In a vacuum, that's great news. Every listener the company signs up is another step towards viability.

However, it's the upstart's misfortune to report this a week after rival XM Satellite Radio(Nasdaq: XMSR) announced that it had nearly 1.7 million subscribers. Yes, XM had a head start. So what?

Motley Fool Stock Advisor recommendations Amazon(Nasdaq: AMZN), eBay(Nasdaq: EBAY), and Netflix(Nasdaq: NFLX) all were accused of having head starts, and no one seems to remember who came in second. And the fact is, XM signed up more than 320,000 new subscribers in the most recent quarter. It has taken Sirius nearly two years to get to 400,000.

Sirius does have a few advantages over XM. It does. It sports a stronger balance sheet. It has developed superior content programming when it comes to pro sports. Its satellite situation is more stable. It draws a larger sum when it comes to average revenue per subscriber. Those are valid strengths.

No, Sirius isn't doomed. This market will continue to grow as people become enamored with the prospect of commanding over 100 digital channels. There will be plenty of market-share pie to share. And while the steep losses by both players are troubling, they are par for course during the customer acquisition phase.

As usual, it boils down to valuation. Is XM worth $4.2 billion? More importantly, with more than 1.2 billion fully diluted shares out there, is Sirius worth $3.7 billion? That seems like an awfully narrow margin given XM's considerable lead. It's not too often that a clear market leader isn't granted a more respectable premium. More often than not, it doesn't stay that way for long..

Longtime Fool contributor Rick Munarriz would gladly broadcast his opinion on more than 100 channels of digital radio -- if only someone would listen. He owns shares in Netflix but not of any of the other companies mentioned in this story.

Di scussion Board of the Day: Sirius Satellite Radio

Tell us this: Is Sirius misunderstood or overvalued? Will the company catch up to XM? Which service do you prefer and why? All this and more -- in the Sirius Satellite Radio discussion board. Only on Fool.com.

Mo re on Fool.com Today

It's a simple measure of management effectiveness... and one of Tom Gardner's tools for digging up Hidden Gems. Rex Moore has The Beauty of ROE.... Bill Mann is at it again. He wants to know why the SEC is picking on National Presto for navigating its ravaged industry. Read on in Presto Stays Its Course.... And don't forget our third installment of David and Tom Gardner's interview with Starbucks Chairman Howard Schultz.

In other news:

For a list of all our stories from today, see our Today's Headlines page.