Two weeks ago, our resident mutual fund analyst, Shannon Zimmerman, wrote about how he was making plans for his soon-to-be-born first child's financial future. Well, this week the future came a little quicker than expected as Penelope Louise Zimmerman was born. Congrats to Shannon and his wife, Kristin (who is also a longtime Fool). Is it time to start planning for your kid's first fund?

In today's Motley Fool Take:

Juniper Sparkles


Ben McClure

By now, you will have heard the news. Network equipment maker Juniper Networks(Nasdaq: JNPR) delivered second-quarter results late yesterday that trounced Wall Street profit and sales estimates, driving up the price more than 13% this morning to $24.91.

Indeed, the results are dazzling. Juniper posted profits of $42.7 million, or $0.08 a share, excluding one-time expenses. That's up from $13.6 million a year ago. Meanwhile, revenue soared 86% to $307 million.

With plucky numbers like that on display, it's hard to argue with the market's enthusiasm for Juniper. On paper, Juniper looks great. But what goes unpublished matters, too. There are reasons to think twice before loading up on Juniper at today's price.

For starters, Juniper's chief financial officer has decided to step down. Sure, he plans to stay on at the company, but his departure from that senior position could signal bad news. While the resignation may be completely innocent, this one demands closer inspection.

Conspicuously absent from Juniper's Q2 statement was any mention of how the company plans to take on its big rival, Cisco Systems(Nasdaq: CSCO). As I pointed out in my recent commentary, they are battling for a share of the core router market, selling electronic devices to corporations and telecom carriers that direct Internet data traffic over networks. Cisco recently unveiled its huge, fast router (HFR), a hand-end product that poses a real threat to Juniper in the high end. There is also Nortel(NYSE: NT) and Lucent(NYSE: LU) to contend with.

Juniper says its board has authorized a stock repurchase program of as much as $250 million. You can interpret that move two ways. It might simply mean that Juniper thinks its shares are cheap and that it's putting its money where its mouth is. Another reason to consider: To keep its shares afloat, Juniper needs to reduce potential share price dilution created by generous employee stock option plans.

Juniper is not in trouble. Not by a long shot. But call me grumpy: The stock trades at over 60 times 2004 earnings and 45 times 2005 earnings. No other networking industry player, besides Qualcomm(Nasdaq: QCOM), trades at such high multiples. Despite the strong second-quarter results, it doesn't look like a good bet here.

Fool contributor Ben McClure hails from the Great White North. Ben doesn't own any shares mentioned here.

Shameless Plug: Get a Broker

If you want to buy stocks, you're going to need a broker. And who wouldn't want to own stocks? There is no place over the past 100 years where your long-term savings would have fared better than the stock market -- not in bonds, not in real estate, and not in gold. Our Broker Center makes it super-easy to pick the right broker for you, so check it out.

Intel Out of Line


Rick Aristotle Munarriz (TMF Edible)

If traders are moving blocks of the old chips, does that make them chips off the old blocks?

Yes, corny opening aside, Intel(Nasdaq: INTC) is in the news again. The semiconductor giant reported its fiscal second-quarter earnings last night, and the results showed heady improvement. Earnings nearly doubled for a $0.27-a-share showing, while revenues climbed 18% higher to hit $8.05 billion. That was in line with analyst targets.

Just last month, during the company's mid-quarter report, Intel had projected revenues to clock in between $8.0 billion and $8.2 billion. So, on that front, it was disappointing to see the top line come in on the low end of that range. Back in March, its mid-quarter report also narrowed the year's opening quarter to that same revenue range. The company eventually tallied up the period at $8.1 billion.

$8.1 billion? $8.05 billion? What's a cool $50 million between friends? Plenty. When a company sets the bar, it often gives itself plenty of wiggle room on the downside. I remember a time when Microsoft(Nasdaq: MSFT) and Intel would tease the market with guidance only to blow those marks away.

Clearing its own hurdles should be a breeze. It's like dictating poker rules after you've seen your hand. It's like Barry Bonds pointing to the fence when he's at the plate -- in Little League. The fact that Intel came in at the low end seems to indicate that business softened in the latter part of June.

With many analysts expecting chip sales growth to slow next year, this should be the time when such companies as Intel and AMD(NYSE: AMD) revert to their old habits of underselling their fiscal potential.

Intel expects sequential improvement, but that has typically been the seasonal case. Come on, Intel. Forget about the promises you keep. How about the promises you beat?

Longtime Fool contributor Rick Munarriz thinks that Intel inside could probably use a batch of fresh air from the outside. He does not own shares in any companies mentioned in this story.

Discussion Board of the Day: Current Events

The Commerce Department reported a 1.1% drop in retail sales in June, a sharper decline than initially expected. Do you think high energy prices and bad weather have dampened sales? Has your spending tapered off this season, or are you scooping up the midsummer deals? Share your views with other Fools in our Current Events discussion boards.

Harley Rolls On


Alyce Lomax

(TMF Lomax)

Who ever said a company starting its second century in business should add up to a geriatric outlook? Despite recent nervousness over whether Harley-Davidson's(NYSE: HDI)successful centennial push last year had flooded its growth engine, the stock motored to a new 52-week high today when the company more than delivered second-quarter earnings.

Harley's second-quarter earnings motored 22% higher to $247 million, or $0.83 per share, with a much-better-than-expected 8.9% boost in sales to $1.33 million. Analysts had expected the motorcycle maker to earn only $0.75 per share.

As has been the case with lots of luxury goods, after a protracted period of recession -- and the subsequent repression of those consumer impulses -- it seems lots of folks had pent-up cravings. In this case, those cravings were for brand-new Harleys to enjoy some summer fun on the roads. The company cited hyper floor traffic in its dealerships and interest in the company's Sportster, which has been redesigned for 2004.

Going forward, the appetite for Harleys could even extend beyond Baby Boomers and young thrill seekers. Rick Munarriz recently reported that Harley plans to take the high road to China. He pointed out there are plenty of roads in the world for Harley to rule.

Harley, with its loyal following that has built its very solid brand, sort of proves you just can't get a cult stock down; buy-and-hold investors who climbed onto Harley years ago must be happy campers these days. However, it's always tough for prospective investors to figure out a point to jump in.

Here at the Fool, we laud companies that include their cash flow statements with earnings, and Harley has that habit down pat. We also like to focus on companies that grow free cash flow, so that's a metric to watch; free cash flow indicates a company's ability to generate and hold on to cash.

For the first six months of this year, Harley's free cash flow increased a mere 3% from the same period last year, with net income growth of 16.3% outpacing it. Another element to keep an eye on going forward is that when isolating free cash flow growth for the second quarter alone, Harley's FCF actually dropped 19% compared with the same period last year.

Even with today's spike in stock price, Harley shares are trading at a P/E of 25, the usual premium attached to the stock. Investors are betting that that's not too high a price to pay, considering the company continues to show that its appeal remains fresh with buyers.

Read more about Harley:

Alyce Lomax does not own shares of any of the companies mentioned.

Quote of Note

"Any fool can make a rule, and any fool will mind it." -- Henry David Thoreau

McDonald's Fast-Forwards


Alyce Lomax (TMF Lomax)

Any investors questioning how long McDonald's(NYSE: MCD) could keep us all lovin' it found their answer today. The company gave an upbeat preview of second-quarter earnings, stating that it will exceed analysts' expectations, driving its stock price up 5%.

Early worries about April's loss of the company's CEO Jim Cantalupo, widely regarded as the engineer of the company's high-profile turnaround, seem to have some reason to subside.

McDonald's said second-quarter earnings will come in at $0.47 per share, a 27% increase over the same period last year and $0.03 better than analysts' expectations. Worldwide same-store sales were up 5.6% in June, following a similarly upbeat May. Second-quarter comparable sales increased 7.8% -- what the company described as the highest second-quarter sales increase since way back in 1987.

As an investing space, fast food has been a hot topic over the last year. McDonald's results look hotter still, when you consider the fact that it's claimed sizzling same-store sales gains in June while burger rival Wendy's(Nasdaq: WEN) recently lagged, blaming cold weather and, one might guess, a certain degree of consumer malaise.

When it comes to burgers, McDonald's also faces competition from private companies like Burger King and Subway, as well as Yum! Brands(NYSE: YUM), which runs the Pizza Hut and Taco Bell chains and got some Foolish treatment today.

What helped boost McDonalds' second-quarter outlook? Exactly some of the recent initiatives we've watched and wondered about. The company's new emphasis on healthy fare and technologically appealing promotions are among the reasons cited for the company's turnaround. Mickey D's cited the launch of its meal-sized salads in Europe, as well as its promotion with Sony's(NYSE: SNE) Connect service, featuring downloaded tunes to go with Big Macs. (Watch as rivals try to copy that successful promotional offer.)

There's plenty on the plate for McDonald's right now. You might wonder how a recent fat lawsuit might impact the fast-food giant, or contemplate whether push-button kiosks will improve its fortunes. Regardless of the good news, investors may very well want to brace themselves for some degree of sales slowdown in the second half of the year. After the successes in the last year, it's hard to imagine it's not inevitable.

Alyce Lomax does not own shares of any of the companies mentioned.

More on Today

Can companies grow effectively via acquisition? James Early thinks he's found a couple in 2 Hungry Small Caps.... In 2 Pint-Size Dividend Payers, Nathan Parmalee looks at two small banks that can provide a healthy balance to a portfolio.... If your stock analysis stops with the simplistic, you're in for trouble, says Bill Mann in How Shortcuts Can Cost You.

In other news:

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