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            B R E A K F A S T   W I T H   T H E   F O O L
                    Thursday, October 19, 2000

benjamin.rogers@enron.com
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"Always forgive your enemies -- nothing annoys them so much." --
Oscar Wilde


NOKIA TO THE RESCUE
The leading mobile phone maker reports estimate-beating earnings
and an optimistic outlook for sales of its mobile handsets.

By Chris Rugaber

Finnish mobile handset manufacturer and Rule Maker Nokia (NYSE:
NOK) reported third-quarter earnings this morning, coming in
significantly higher than analysts' expectations. The company
also issued positive forecasts for next quarter and for mobile
phone sales in 2001. Nokia was scheduled to report earnings next
week, but apparently decided to do so earlier in response to the
recent volatility in technology and telecom shares.
http://www.fool.com/m.asp?i=161169

Sales rose 50% over last year's third quarter to 7.57 billion
euros ($6.38 billion), while net income jumped 40% to 892
million euros ($752.22 million), or 0.19 per share. Pretax
profit increased 43% to 1.34 billion euros ($1.13 billion),
ahead of analysts' forecasts of 1.06 billion.

Nokia's shares had declined about 40% since the company's July
warning that third-quarter profit would be lower than the second
quarter's, due to product delays. Today's report, and the
company's optimistic outlook, reversed that trend, with shares
up 18% in European trading.

Mobile phone sales, which account for almost three-quarters of
the company's revenues, increased 59%, while operating profits
for the division were up 42% to 1.07 billion euros ($900
million). Operating margin decreased to 19.6%, from 21.9%,
though the company remains far ahead of No. 2 mobile phone maker
Motorola (NYSE: MOT), which recently posted a 6% operating
margin for its cell phone division.

Nokia introduced seven new handset models in the third quarter,
and the company believes it increased its handset market share,
which stood at 27.5% at the end of the second quarter. Motorola
controlled 15.6% and Ericsson (Nasdaq: ERICY), which reports
earnings tomorrow, held 10.3%.

While other mobile phone companies, such as Motorola and
Matsushita, have reduced their projections for industrywide
handset sales, Nokia maintained a positive outlook. "Our view of
the market development fundamentals remains unchanged, with more
than 400 million mobile phones estimated to be sold in 2000,"
said CEO Jorma Olilla in a prepared statement. "For 2001 we
expect the mobile phone market to be in the region of 550
million units." Olilla also stated that as a result of these
figures, the company expects there will be 1 billion mobile
phone users by 2002.

Sales in the company's wireless infrastructure unit were also
strong, with revenues up 34% to 1.92 billion euros and operating
margins improving to 18.1% from 17.3%. Overall, the company
expects "record-breaking" earnings per share (EPS) for the
fourth quarter, and 25-35% sales growth in 2001.

AFTER-HOURS COVERAGE

TECH HEAVIES REPORT EARNINGS
By The Motley Fool Staff
A number of top companies reported earnings last night after the
bell. Check out our after-hours coverage for news on Microsoft
(Nasdaq: MSFT), Akamai (Nasdaq: AKAM), America Online (NYSE:
AOL), Apple (Nasdaq: AAPL), and several other companies, many
that don't begin with A.
FULL STORY>>
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NEWS TO GO

Network switch-maker Extreme Networks (Nasdaq: EXTR) announced
first-quarter fiscal 2001 earnings last night, clocking in with
net income (excluding amortization costs) of $9 million, or
$0.08 per share, ahead of analysts' estimates of $0.06 share,
and double the year-ago figure of $4 million, or $0.04 per
share. Sales were up 29% sequentially to $119.3 million, 153%
higher than last year's third-quarter revenue of $47.2 million.
Shares of the company fell initially in after-hours trading, but
rebounded after the company increased its earnings forecasts for
fiscal 2001 and 2002.

Communications chip designer Broadcom (Nasdaq: BRCM) joined the
earnings parade after yesterday's market close. Sales for the
company's third quarter more than doubled, to $319.6 million,
while earnings (excluding acquisition and other costs) jumped to
$78.7 million, or $0.30 per share, from last year's $28.7
million, or $0.12 per share. Consensus analysts' estimates were
for the company to earn $0.24 per share. Broadcom designs chips
for cable modems, digital set-top boxes, and other high-speed
networking equipment.

Wireless communications software company Phone.com (Nasdaq:
PHCM) also reported earnings last night, and the developer of
the Wireless Application Protocol, or WAP, increased revenues
62% sequentially, to $46.5 million. The company's net loss,
excluding amortization and other costs, was $10.4 million, or
$0.13 per diluted share, ahead of consensus estimates for a
$0.20 per share loss. Phone.com's new partner, Software.com
(Nasdaq: SWCM), with which it expects to merge next month, also
announced earnings. Sales reached $37.6 million, a 27%
sequential increase, and earnings before acquisition and other
costs were $7.4 million, or $0.13 per share, ahead of estimates
of $0.03 per share.

And now for some non-earnings news: According to a Bloomberg
report, telecom carrier WorldCom (Nasdaq: WCOM) is planning to
create a tracking stock for its consumer long-distance business.
The company indicated during its July earnings conference call
that it was considering several options for its slow-growing
voice operation, including a tracking stock. While WorldCom did
not comment on yesterday's report, final word may come when the
company releases earnings on October 26. Like other
long-distance carriers, WorldCom is seeking to highlight the
healthy growth of its data and Internet services by separating
out the stagnant consumer long-distance unit, which grew
revenues by only 1% last quarter.

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EDITOR'S PICK

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