Space, the final frontier. The music accompanying those famous words was written by composer Jerry Goldsmith, who died Wednesday night. Goldsmith deserves credit for creating the memorable music for dozens of classic movies and television shows ranging from "Planet of the Apes" to "Perry Mason," and the blame for the syrupy theme for "The Waltons." Just goes to show that no one -- musical genius or investor -- can bat 1.000.

In today's Motley Fool Take:

eBay's Global Dreams


Rick Aristotle Munarriz (TMF Edible)

With the Olympics now just weeks away, is it too late to see whether eBay(Nasdaq: EBAY) can qualify for the country's pole-vaulting team? I mean, you just don't clear the bar -- again -- and raise the bar -- again -- and expect to be left off the list of medal-chasing hopefuls.

Last night, eBay posted second-quarter earnings that saw profits double to $0.28 a share while revenues clocked in 52% higher at $773 million. It also raised its full-year bottom-line targets by four cents to $1.10 a share, or $1.17 on a pro-forma basis.

But the problem is that these Wall Street analysts posing as Olympic judges can be a cruel lot. In a case of "been there, done that," they had gone ahead and raised the bar, without eBay's blessing already, a pair of pennies higher than eBay's revised guidance. So while eBay topped its sales and earnings projections for the quarter and jacked up the rest of 2004, it was an ironic disappointment.

That, along with the company opening up its pocketbook for a new data center, sent the shares lower, but there was still plenty to like about the company's report.

The company continues its growing globe-trotting ways. In fact, its flagship domestic auction business grew by only 32%. Beyond our borders, the company's auction segment grew by a whopping 76%. If that trend continues, the company's international transaction business will lap eBay's stateside take by early next year.

Think about that for a bit. If a faster-growing segment becomes the leading revenue driver for the company next year, wouldn't that mean the possibility of accelerated earnings growth come 2005? As we saw when Yahoo!(Nasdaq: YHOO) teamed up with Sina(Nasdaq: SINA)earlier this year to enter the Chinese auction market -- one in which eBay is already well-represented -- there are plenty of growth opportunities abroad. eBay is right there in the thick of things, but why should that upbeat observation get in the way of these Olympic judges throwing around doping accusations?

That's fine. Let the bids fall as they may. This prolific Motley Fool Stock Advisor newsletter recommendation has fared well in the past. Luckily, for a nimble eBay, the Olympics remain a global event.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user -- now with 138 positive feedbacks to show for it -- but he does not own shares in the company. He does not own shares in any of the companies mentioned in this story.

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No Stopping Starbucks


Alyce Lomax (TMF Lomax)

Yesterday, I skipped what has been fast becoming my one-per-day latte habit, and, boy, did I regret it. (Yep, they've got me hooked, too.) Speaking of, Starbucks(Nasdaq: SBUX)did it again last night, reporting a 44% rise in its fiscal third-quarter profits and ratcheting up its earnings-per-share estimate for the year. What was that about being hooked?

Starbucks' net earnings increased to $98 million, or $0.24 per diluted share, beating analysts' estimates. (Keep in mind analysts were expecting $0.22 per share, and some were pointing out how Starbucks tends to beat by a penny). Net revenues increased 27% to $1.32 billion.

It's yet another one of "those" quarters. (Sigh.) Even though it's summer and the company recently released a new frozen drink to court the weight-conscious, this is one steamy quarter. Well... just like Starbucks has been consistently delivering for quite some time.

Further, the company increased its EPS guidance for the year to the $0.94-$0.95-per-share range, from $0.90 to $0.91; note that Starbucks has already upped its guidance once this year, originally calling for earnings of $0.83 to $0.85 per share in fiscal 2004. That's not all. The company also lifted its estimates for fiscal 2005 as well, citing present trends.

Starbucks still targets revenue growth for the year at 25% to 30%, and while it said that same-store sales growth is still appropriately targeted at 3% to 7%, it's likely to continue to exceed that range.

What's on the horizon, other than the hypergrowth? Starbucks will continue to sink money into expanding its interesting new business platform, spearheaded by its HearMusic unit, in the fourth quarter. One of the company's new initiatives is to give its customers the ability to download music and create CDs in Starbucks outlets.

Meanwhile, Starbucks admitted to a possible, though not definite, hike in drink prices in 2005, citing rising commodity and labor costs. We all know its specialty coffee drinks have a reputation for being expensive -- many like to compare them to the cheap-jolt cup o' joe you can get at McDonald's(NYSE: MCD) or 7-Eleven(NYSE: SE). However, as I've said before, it seems consumers love their Starbucks so much that a few cents more just wouldn't drive them elsewhere.

As always, Starbucks is trading at what sounds like a rich 49 times forward earnings. Starbucks is one company, however, that no one's been able to prove overvalued, given its continued breakneck growth and unflagging popularity among consumers. So far, there's nobody stopping Starbucks.

Alyce Lomax does not own shares of any companies mentioned.

Discussion Board of the Day: eBay

eBay posted second-quarter earnings that saw profits double and revenues rise. Is the company making a bid for your attention? What can derail the company's growth? All this and more in the eBay discussion board.

Viacom's Dazzling


Tim Beyers

Mel Karmazin may have left the building, but his legacy of performance appears to live on at CBS parent Viacom(NYSE: VIA). The media conglomerate known best as the lead purveyor of reality television -- from Survivor to The Amazing Race to the granddaddy of 'em all, The Real World from its MTV unit -- turned in another strong quarter this morning.

Second-quarter revenues were up 7% to $6.8 billion from $6.4 billion in the same period a year ago. Earnings jumped 14% to $754 million, or $0.43 per diluted share, up from $660 million, or $0.37 per stub a year ago. Free cash flow for the quarter was up 14%, to roughly $1 billion. Cash flow is up more than 20% year-to-date.

Executives once again pointed to ad revenues as the key driver of Viacom's growth. Ads have so far this year accounted for 49% of the firm's $13.6 billion in revenue. That's up from 46% at this same point during 2003.

The ad resurgence is probably at least partially linked with the popularity of CBS' spate of reality shows and Viacom cable properties, including MTV and Nickelodeon. Cable TV revenues were up 18% for the quarter and are up more than 19% year-to-date. Revenues from broadcast television are up 11% for the quarter, and 15% thus far during 2004.

If nothing else, the good results could grab the attention of investors who have all but ignored the sector after turmoil at competitor Disney(NYSE: DIS). Any why not? Viacom has already generated $1.8 billion in free cash flow this year. That means it trades for just seven times its free cash flow when compared to its total enterprise value of $12.6 billion. Disney trades for 18 times its enterprise value-to-free cash flow. And Fox Entertainment(NYSE: FOX) and General Electric(NYSE: GE) aren't cheap either, trading at 24 and 26 times their cash flow, respectively.

It's too early to tell if Viacom shares really are a bargain, but cash flow could continue to improve after Blockbuster(NYSE: BBI) is finally spun off this fall. Investors jumping in here will have the benefit of getting paid to sit around as Viacom pays a 0.69% dividend as of this writing. If that sounds good to you couch potatoes, then it might be time to tune in.

For more Fool coverage of the entertainment biz:

Fool contributor Tim Beyers isn't much of a reality TV fan, but he has yet to watch The Amazing Race. He wonders what all the fuss is about. Tim owns no stake in any of the companies mentioned, and you can view his Fool profile here.

Quote of Note

"A prudent mind can see room for misgiving, lest he who prospers would one day suffer reverse." -- Sophocles

What's Not to Like About Qualcomm?


Dave Mock

Not one to spoil a wireless party, Qualcomm(Nasdaq: QCOM) outshined recent positive earnings from the likes of Motorola(NYSE: MOT), SprintPCS(NYSE: FON), and Nextel Communications(Nasdaq: NXTL) with its fiscal third-quarter report after the bell yesterday. The company earned $486 million on $1.3 billion in revenue, yet again surpassing the most optimistic estimates from analysts.

The increase in sales helped generate $386 million in free cash flow for Qualcomm. On its way to Microsoft(Nasdaq: MSFT)-like largesse, Qualcomm now sits atop $7 billion in cash or equivalents, enough to easily fund a dividend of $0.14 per share.

The standout quarter continues a surge of strong growth that the wireless technology provider has enjoyed over the last year. And the party won't be ending anytime soon, according to the outlook of the company's management. With rosy predictions for the next quarter, Qualcomm estimates its fiscal 2004 revenue could be 35% ahead of last year's takings. Even better, profits should be up by a whopping 50%. Few other companies can claim this level of growth, save for many of Tom Gardner's Hidden Gems.

The fuel for Qualcomm's rapid growth? Its patented CDMA technology is spreading faster than California wildfires in summer. With many network operators around the world recently loosening purse strings to upgrade networks, Qualcomm is benefiting from the move to a new generation of wireless services.

In addition to Verizon Wireless'(NYSE: VZ) and SprintPCS' adoption of its high-speed 1xEV-DO technology, many European operators are also now moving quickly into third-generation (3G) services for which Qualcomm also earns royalties. This alternative flavor of 3G -- called WCDMA -- accounted for 25% of Qualcomm's $436 million in royalties this quarter. Going forward, management estimates that WCDMA will account for an increasing portion of its business.

Information in Qualcomm's earnings release also points to a new growth cycle in the budding stages -- the average selling price (ASP) of mobile phones using its technology is actually increasing. Normally, ASPs decline by roughly 10% per year as designs mature and competition increases. Growing ASPs indicate consumers are beginning to adopt a new generation of advanced phones in large numbers.

Classic "hockey stick" growth patterns tend to reach their critical growth phases soon after this early adoption phase gives way to adoption en masse. With a solid position in the most popular forms of 3G technology, Qualcomm is in a sweet spot.

Fool contributor Dave Mock wonders whether any company has ever counted a POG collection as cash equivalents. He owns shares of Motorola and has authored the corporate biographyThe Qualcomm Equation.

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Tim Beyers finds high-carb stocks worth a nibble in 5 Stocks From High-Carb Heaven.... In A Supermarket Cashier Talks Back, Selena Maranjian shares what one cashier is dying to tell her customers.... Robert Brokamp explains what happens when you postpone investing in tax-friendly accounts in The Cost of Not Saving for Retirement.

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