Human Capital & Careers

Bracing for the Start of Earnings Season

Third-wuarter earnings come rolling in, oil rises again, shortage of techno-gadgets and more.
Stephen TaubOctober 10, 2000

Okay nervous nellies. Are you ready?

After several weeks of market rocking earnings warnings, the real numbers begin rolling in today. These results will have a huge impact on how the overall stock market performs over the next few months and how receptive investors will be to new issues of stocks and bonds.

Kicking off the third-quarter reporting fest on Monday will be Yahoo, Motorola, Seagate, Biogen and Abbott Labs.

Now, keep in mind that Yahoo usually beats estimates by a penny or so per share. However, there are a few people out there who fret about a sagging advertising environment.

Is it coincidental that this morning the Web portal and search engine is expected to announce a new partnership with Net2Phone Inc., which will enable it to offer Internet content over the phone, voice mail and long distance calling — all for free?

Motorola will be reporting on the heels of rival Nokia’s earnings warning.

Don’t forget: Old economy companies typically report before the market opens while New economy companies traditionally wait until the markets officially close.

However, shortly before stock market trading officially resumes, investors seem upbeat after Monday’s scary triple-digit plunge, only to reverse course and nearly break into black (green?).

However, one recent worry has returned—rising oil prices. Just when you thought it was safe to declare oil prices to be peaking, along comes the Mideast crisis. Presto—rising oil prices. However, despite a rise to $31.36 a barrel, Brent crude is still way off of its 10-year high of $34.98 pierced last month. Phew!

AOL-Time Warner Soap Opera

In merger news, now it seems that the European Commission will on Wednesday give conditional clearance to America Online’s $135 billion acquisition of Time Warner. At least this is the word from Reuters. We’ll believe it when we hear it, right?

However, even if the EU does approve the deal, it doesn’t change the fact that the Euro regulators have become the bad cop in any international deal. In order to do a cross-border deal, you will now have to spend as much time courting those folks as you do placating the U.S. regulators. Not fun.

In other deal news, Primedia said it will buy Kagan World Media in an all- stock deal. Kagan, a privately-held company, has become a major consultant and publisher for almost anything related to media, telecommunications and entertainment. Primedia, whose biggest holder is buyout firm Kohlberg Kravis Roberts, with an 82% stake, publishes about 250 consumer and trade magazines, as well as apartment and home guides, business directories, and databases.

In tech news

If you are dreaming of a Palm for Christmas, you better hope that your gift giver likes to shop early. Otherwise, you’ll be poking that little stick at a hunk of coal. For, due to parts shortages, Palm said it expects to come up short of demand this holiday season. In fact, parts shortages should affect supply of wireless phones and many other techno-gadgets, according to The Wall Street Journal.

Meanwhile, the next time you attend a convention and settle into your hotel room hoping to watch TV after a long day of job-hunting, er networking, er attending seminars— that’s it—don’t be surprised if the TV set is talking to you. Well, sort of.

You see, if you are staying at a Hilton Hotel, keep in mind that the chain has agreed to set up a joint venture with LodgeNet Entertainment to offer interactive television and Internet service right to your hotel room. One key to the venture’s future plans is to offer advertising tailored to the attendees right in their hotel room. You can’t get away from it. Soon, when you lay down for the night, suddenly the bed will blurt out: “This sleep will be brought to you by Sleepy’s.” No, I’m just kidding about this one. Really!

Over in the old media world: The early 1960s Nifty Fifth member Xerox, which has had a history of snatching failure from the jaws of success for the past 20 years, announced after the market closed on Monday that it would slash its quarterly dividend by 75% to just a nickel. This comes on the heels of a major profit warning.

In product news, Western Digital said it will supply hard drives for Microsoft’s