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            B R E A K F A S T   W I T H   T H E   F O O L
                      Friday, November 10, 2000

benjamin.rogers@enron.com
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NVIDIA KEEPS CHIPPIN'
Nvidia has overtaken ATI Technologies as the largest maker of
graphic-enhancing chips for desktop computers.

By Mike Trigg

Computer graphic chip maker Nvidia (Nasdaq: NVDA) reported
better-than-expected third-quarter results after the market's
close yesterday, citing market share gains attributable to
original equipment manufacturers' (OEM) and system builders'
rapid adoption of its GPU technologies. The company maintained a
robust growth outlook, expanding out of its core desktop
business.

Nvidia's fiscal third-quarter (ended October 31) net income was
$28.1 million, or $0.35 per share, compared to $10.6 million, or
$0.15 per share, in the comparable period a year ago. The Street
consensus estimate called for the company to earn $0.32 per
share. Moreover, revenues came in at $198.2 million, more than
doubling year-over-year from $97 million. And operating income
grew 142% to $36.6 million.

According to a new study this week by Mercury Research, Nvidia
has overtaken ATI Technologies (Nasdaq: ATYT) as the largest
maker of graphic-enhancing chips for desktop computers. For the
third quarter, Nvidia chips were in 48% of all desktop
computers, increasing more than twofold from a year ago.

Meanwhile, ATI's desktop market share slipped five percentage
points to 34%. However, in the laptop market, ATI expanded its
market share from 29% in the same period a year ago to 57%,
highlighted by new contracts with IBM (NYSE: IBM) and Dell
(Nasdaq: DELL). Despite losing money in the last two quarters,
ATI expects to re-enter the black in the current quarter (ends
November 30). Nevertheless, Nvidia's gains continue to look
impressive in comparison to the competition.

The Santa Clara, Calif.-based Nvidia has made significant gains
winning over longtime ATI customers, including Compaq Computer
(NYSE: CPQ) and Gateway (NYSE: GTW). According to the Street,
the shift has occurred because Nvidia has been more successful
at rolling out improved chips every six months. In a press
release yesterday, CEO and President Jen-Hsun Huang cited its
newest GeForce chip, the GeForce2 Ultra, as cause for its
expanding leadership position.

The other competitive force, 3Dfx Interactive (Nasdaq: TDFX), is
coming off a disappointing July quarter when revenue was less
than half of what the Street expected. The company attributed
the shortfall to component shortages and "competitive and retail
seasonality factors." Similarly, the company announced it would
report disappointing results for the quarter ending in October.

AFTER-HOURS COVERAGE

DELL ANNOUNCES Q3

Direct PC seller Dell announced third-quarter results after the
market's close today, in line with the consensus Street
expectation. With speculation throughout the day looming that
Dell had "juiced" revenue numbers at quarter's end, shares
traded down roughly 6% to close at $28.38. The company also
reconfirmed earlier guidance that called for sales to rise 27%
year-over-year, slightly below the 30% growth the company was
expecting earlier in the year.
FULL STORY>>
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NEWS TO GO

Guess what? Sexy jeans retailer Guess (NYSE: GES) announced
third-quarter profits after the market's close well below Street
expectations, citing excess inventory and a difficult retail
environment. Guess reported third-quarter profits of $5.6
million, or $0.13 per share, compared to $14.2 million, or $0.33
per share, in the year-ago period. That's well below the Street
consensus expecting $0.36 per share. Inventory levels at
quarter's end were $164.2 million, up from $94.2 million last
year. Total revenue increased 39% year-over-year to $216.4
million. Guess also revised its fourth-quarter outlook, now
calling for earnings to be $0.08 per share to $0.10 per share.
The Street estimate called for $0.36 per share.

Construction and industrial supplies distributor Hughes Supply
(NYSE: HUG) reported that it would miss third-quarter and
full-year estimates. The company expects earnings between $0.75
per share and $0.79 per share, down from $0.87 per share in the
same period last year. The consensus Street estimate had called
for $0.93 per share. Sales for the quarter should come in at
$860 million, about 10% lower than expected. The company expects
full-year sales growth of 9% to 11%, and full-year earnings
between $2.75 per share and $2.80 per share. The
slower-than-expected growth was attributed to commodity pricing
exposure for many plumbing and building materials products.

You learn real good! Computer training company Learning Tree
International (Nasdaq: LTRE) posted solid fourth-quarter and
full-year results after the market's close yesterday. Learning
Tree reported earnings of $9.1 million, or $0.40 per share,
compared to $5.7 million, or $0.26 per share, one year ago.
That's well ahead of the Street consensus of $0.36 per share.
Moreover, the Orlando, Florida-based company pulled in $56
million in sales, increasing 21% from $48.5 million in the same
period last year. For the entire fiscal year, Learning Tree
earned $50.4 million, or $1.65 per share, compared to $14.7
million, or $0.57 per share, last year.

Managed healthcare service provider PacifiCare Health Systems
(Nasdaq: PHSY) reported a significant drop in third-quarter net
income, citing rising medical costs related to the company's
transition from capitated contracts to per-diem, fee-for-service
or shared-risk arrangements with hospitals. The Santa Ana,
Calif.-based company turned in earnings of $5.2 million, or
$0.15 per share, compared to $69.3 million, or $1.54 per share,
in the year-ago period. The Street consensus called for a
$0.07-per-share loss. Results reported for the quarter include a
$3.8 million credit, or $0.11 per share, related to the early
termination of a license agreement. Results for the same period
last year reflected a $1.7 million net charge, or a
$0.04-per-share loss, for impairment and disposition activities.
Revenue were $2.87 billion, increasing 14% from $2.52 billion.

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