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In today's Motley Fool Take:
- Wal-Mart Retreats, Then Charges
- Shameless Plug: Insurance Center
- Nortel-Cisco Merger Unlikely
- Discussion Board of the Day: Kodak's Shrinking Market
- Batter Up, Taco Bell
- Quote of Note
- More on Fool.com Today
Wal-Mart Retreats, Then Charges
By Seth Jayson
Is it a slow news day, or are the financial headlines this meaningless all the time? (Answer: Yes and yes.) Wal-Mart
Need I urge you to look a bit deeper than the headlines? Or dare I make the heretical suggestion that you ignore them altogether? (Feel free to ignore me, even. I swear I won't pout.)
Still here? On with the show.
What the world's biggest retailer said was that so far, total comparable sales for June were "around" the low end of their forecasted 4% to 6% increase. There are some date shifts from the prior-year reporting period that move some July 4 revenues out of this year's period. The rest is unexplained, but in the end, company prognostications and a five-week snapshot like these often turn out to be pretty meaningless.
After all, two weeks ago, things looked just fine, and last month's numbers flouted management's earlier, dire predictions of consumer gas shocks. Furthermore, the way the firm has been knocking the cover off the ball lately -- to use the most summery metaphor I can find -- shareholders have little to fear. Sure, it would be nice to see sales predictions keep zooming upward, but even if they falter, the Bentonville bruisers have found ways to juice earnings anyway, such as bettering the firm's margins.
And with inflation remaining the media's economic fear o' the month, Wal-Mart, Target
In other news, after a protracted battle over fees, Wal-Mart announced that it would now resume the acceptance of customers' MasterCard debit cards. This is another move that will draw plenty of headlines, but probably means very little in terms of dollar signs. With the average American already packing a handful of credit cards, prospective Wal-Mart customers whose bank cards were shut out by the long-running flap will have long since found alternative ways to pay.
For more Fool retail coverage and investing tips:
- Take Bill Mann's advice and forget the numbers.
- Learn what to ignore on your way to becoming a lazy investor.
- What does summer have in store for discounters?
Shameless Plug: Insurance Center
Life happens. Sure, you can't prepare for every little thing, but you can protect yourself against some things. Let our Insurance Center teach you the types of insurance out there and how much of each you'll need to secure yourself, your family, and your worldly belongings.
Nortel-Cisco Merger Unlikely
By Ben McClure
Nothing stokes the fire of buyout speculation more than partnership talks. Sure, networking giant Cisco Systems
Bill Owens, the new Nortel CEO, says his company is gearing up for consolidation in the industry. John Chambers, Cisco's CEO, says he'd love to have Nortel as a partner. In terms of closer ties, that's where things will end.
Cisco is no stranger to inking commercial alliances with other big equipment vendors, including Ericsson
A commercial partnership that brings to the table Nortel's optical and wireless technology, plus its big telecom carrier customer base, might work for Cisco. But a full-blown merger doesn't fit with Cisco's proven strategy of acquiring small, privately held companies with complementary technology. Nortel is not only big and public, but also competes directly with Cisco in the voice-over Internet protocol, or VoIP, market.
The fact remains that Chambers, even if he saw potential synergies emerging from a merger, knows full well that he would struggle to convince shareholders to do a deal. A corporate mess, Nortel has been floundering of late thanks to sagging growth, mounting litigation, and disturbing accounting issues. Until these problems get cleared up, Nortel will likely remain on the corporate world's "don't touch with a 10-foot pole" list.
Cisco knows better than to permanently tie its future fortunes to Nortel. This week's mergers-and-acquisitions chatter is just that -- chatter that investors can afford to overlook.
Fool contributor Ben McClure hails from the Great White North. He doesn't own shares of any companies mentioned here.
Discussion Board of the Day: Kodak's Shrinking Market
George Eastman put the first simple camera into the hands of consumers in 1888. Now his company, Eastman Kodak
Batter Up, Taco Bell
By Nathan Slaughter
Major League Baseball has announced a new addition to its marketing lineup, handing a batting helmet to Yum! Brands'
The deal, which is reportedly worth an estimated $25 million, will grant Taco Bell exclusive category rights, signage, and plenty of airtime during baseball's two marquee events: the All-Star Game and the World Series. Some had predicted McDonald's
With All-Star festivities less than a month away, Taco Bell won't be sitting on the bench for long. The diamond anniversary of the Midsummer Classic, the highest-rated sporting event of the summer, will take place July 13 in Houston's Minute Maid Park. The contest's participants are largely determined by fan selection, and in-stadium balloting sponsored by Ameriquest Mortgage has drawn record response. When combined with online voting and balloting through Pepsi displays at Wal-Mart
The Taco Bell name should be quite visible during other events surrounding the hoopla of the big game, including the Cendant
Though sports-related sponsorships can be risky propositions, this one appears to be a winner for Taco Bell. It has bought into the timeless popularity of baseball, as close to a sure thing as can be found in the business world. The franchise name will be a prominent fixture in the sport's highest-profile events, as well as other national broadcasts on Fox and ESPN.
Fan-oriented promotions are much more engaging than stadium naming rights, which don't seem to resonate very well. Sometimes the corporate logo is an unwelcome intrusion on hallowed ground and, let's be honest, XYZ Telecommunications Field doesn't exactly have the same ring as Fenway Park. Taco Bell has a unique opportunity to generate enthusiasm for its products, as well as the game. If it can think of a creative way to get fans more involved, both the cash registers and the turnstiles should be busy.
Fool contributor Nathan Slaughter is an unabashed fan of the National League, and is hoping the senior circuit will pull off its first All-Star victory since a 6-0 shutout in 1996.
Quote of Note
"If you live long enough, the venerability factor creeps in. First, you get accused of things you never did, and later, credited for virtues you never had." -- I.F. Stone
More on Fool.com Today
In other news:
- Hooker Latches on to Profits
- aaiPharma Feels the Pain
- Clinical Trials Controversy
- Jones Seals Maxwell Deal
For a list of all our stories from today, see our Today's Headlines page.