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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 12, 2000

benjamin.rogers@enron.com
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"The best audience is intelligent, well-educated, and a little
drunk." -- Alben W. Barkley


REDBACK RAMPS UP
The network equipment maker quadruples revenues and reports its
first pro forma profit.

By Chris Rugaber

Network equipment maker Redback Networks (Nasdaq: RBAK) reported
third-quarter results after yesterday's market close, almost
quadrupling revenues to $80.6 million from last year's $20.6
million. On a pro forma basis, Redback eked out $3.2 million in
profit, or $0.02 per share, ahead of analysts' consensus
estimates of a $0.02 per share loss.

Including costs related to its acquisitions of Siara Systems and
Abatis Systems, as well as stock compensation expenses, the
company reported a loss of $308.1 million, or $2.50 per share.

Redback makes subscriber management systems that enable telecom
service providers to handle heavy traffic on high-speed
networks, including cable, DSL, and wireless connections. The
company also recently began ramping up sales of its optical
networking products, which are being used in regional fiber
optic networks.

The company, which was a Daily Double this spring, added 70 new
customers during the quarter, bringing its total to more than
300. This is particularly important for a company like Redback,
since many small networking equipment companies rely
inordinately on only a few customers, and can get slammed if
just one or two buyers delay or cancel a purchase. This may
still be an issue for Redback, however. While the company added
Qwest Communications' (NYSE: Q) U S West unit as a new customer,
the former Baby Bell accounted for 24% of the company's revenues
in the quarter.
http://www.fool.com/m.asp?i=152397

Redback's CFO Craig Genter told analysts in a conference call
that revenues should hit $100 million next quarter, and continue
to grow 20% each quarter next year. As a result, the company
expects sales to hit $645 million in 2001. While such growth is
impressive, at a market cap of $19 billion, the market clearly
expects great things from the company.
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NEWS TO GO

Among the many companies reporting earnings last night was
Advanced Micro Devices (NYSE: AMD), which beat analysts'
consensus estimates by two pennies. The microprocessor and flash
memory maker reported net income (excluding onetime charges) of
$219 million, or $0.64 per share, and sales of $1.2 billion. For
more info, check out yesterday's news report.
http://www.fool.com/m.asp?i=152398

Motorcycle maker Harley Davidson (NYSE: HDI) reported a solid
third quarter yesterday. Net income reached $83 million, or
$0.27 per share, a 27% increase over last year's $65.4 million,
or $0.21 per share. Sales were up 15% to $714.1 million. The
company, which makes over 25% of the heavyweight bikes sold
worldwide, shipped 48,077 motorcycles in the quarter, 13% more
than the year-earlier period, and expects to ship 203,000 this
year. However, sales did fall 38% in the company's Buell
division, which makes a lightweight bike called the Blast, and
which just maybe doesn't appeal to Harley's regular customers.
For more information on Harley Davidson, check out the Drip
Portfolio's recent analysis of the company.
http://www.fool.com/m.asp?i=152399

Fiber optic cable and components maker Corning (NYSE: GLW)
announced yesterday that third-quarter earnings would beat
analysts' estimates, thanks to strong demand. The company
expects to report earnings per share (EPS) of $0.34-$0.35 for
the quarter, 75% above last year's figure and ahead of consensus
estimates of $0.30 per share. For more information on fiber
optics components, be sure to check out our new Internet Report
on the subject.
http://www.lnksrv.com/m.asp?i=152400

Warehouse club operator Costco Wholesale (Nasdaq: COST) reported
a 9% increase in fourth-quarter profit yesterday. Earnings
reached $200.2 million, or $0.43 per share, 10% higher than the
$0.39 per share reached a year ago. Sales rose 20% to $10.6
billion for the quarter. Same-store sales -- sales at warehouses
open at least a year -- were up 9%.
http://www.fool.com/m.asp?i=152401

Fast food company Tricon Global Restaurants (NYSE: YUM)
announced mixed third-quarter results last night, with net
income up 2.7% to $115 million, or $0.77 per share, ahead of
analysts' consensus estimates of $0.70. However, revenues
declined 8.5% to $1.66 billion from $1.81 billion in the
year-earlier period. The operator of Pizza Hut, Taco Bell, and
KFC restaurants also reported that same-store sales rose 1% at
Pizza Hut, fell 2% at Taco Bell (probably thanks to all that
great publicity over recalled shells), and were "little changed"
at KFC.
http://www.fool.com/m.asp?i=152402

Finally, home improvement chain Home Depot (NYSE: HD) warned
today that third-quarter earnings will be below expectations,
thanks to lower prices for lumber and other building materials.
Profits should reach $0.28 per share, less than the $0.31 per
share expected by analysts. Same-store sales should increase 4%,
below the 5% to 7% the company previously forecasted.

Check out yesterday's Foolish market wrap-up with just one click.
http://www.fool.com/m.asp?i=152403
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EDITOR'S PICK

Two Fools debate whether Siebel Systems will continue to
dominate the Customer Relationship Management (CRM) software
industry.
http://www.fool.com/m.asp?i=152404
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