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            B R E A K F A S T   W I T H   T H E   F O O L
                      Tuesday, November 7, 2000

benjamin.rogers@enron.com
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"Politics is supposed to be the second-oldest profession. I have
come to realize that it bears a very close resemblance to the
first." -- Ronald Reagan


ADOBE SWEET ADOBE
The publishing giant sees higher margins ahead. Solid 2001 in
store?

By Rick Aristotle Munarriz

When is less, more? For publishing software leader Adobe
(Nasdaq: ADBE) it means growing operating profits next year by
scaling back on research and development. The company announced
its guidance at yesterday's 2000 Fall Financial Analyst Meeting.

The logic may seem absurd in this era of perpetual obsolescence.
The failure to plant seeds today means less of a harvest to reap
tomorrow. But Adobe feels that it can still seize the future by
trimming research expenditures from 20% to just 19% of projected
sales.

"Our R&D investment is larger than the annual revenues of most
of our competitors, and we do think that gives us a competitive
advantage," Adobe President Bruce Chizen told Fool analyst Zeke
Ashton back in September. So even if the company does hold back
on research, it should still remain ahead of the pack.
http://www.fool.com/m.asp?i=184234

Like hue-tinkering on Adobe Photoshop, it appears that the
prospects are brighter than the 20% growth analysts were
projecting. The company expects revenue growth of at least 25%
next year. With operating margins now set to climb from 31% to
32%, estimates are now poised to be revised about a dime above
the $2.56 consensus.

In the meeting -- which ran just over two hours long -- the
company shared its enthusiasm over its role in the new economy.
Adobe has gone from a leader in the realm of desktop publishing
for print media to serving as the software backbone for online
and network publishing. Its ePaper Solutions segment is expected
to provide a 65% growth spurt in sales next year. That's a stark
contrast to the print publishing side. There the company is
looking for just a 10% hike in revenue. Adobe has always known
how to touch up a picture, and this horizon seems to have a
crusty glow.
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NEWS TO GO

It's election day. Time to voice your vote. Like, what matters
more, the top or the bottom line? VoiceStream Wireless (Nasdaq:
VSTR) reported revenue of $562.2 million, well ahead of analyst
expectations and 317% higher than last year's $134.9 million
showing. Strong subscriber growth led the way. But bloated
expenses found the company also producing a much wider loss than
was projected. The company is in the process of being acquired
by Germany's Deutsche Telekom (NYSE: DT).

Knocking chips off the global building blocks, two sources
abroad warned of lower chip prices earlier today. First it was
Douglas Lee, an executive director at Goldman Sachs in Asia,
predicting that DRAM prices will continue to fall well into next
year. Then Germany's largest semiconductor maker, Infineon
Technologies (NYSE: IFX), warned of weaker demand and
consequently lower prices in its memory business during the
current quarter. However, Infineon reported a strong close to
its fiscal year and maintains a positive outlook through the
next three years thanks to growth in other high-margin
businesses.

General Electric (NYSE: GE)? No. Not quite. But Dollar General
(NYSE: DG) and Emerson Electric (NYSE: EMR) reported earnings
this morning. Both companies held their ground with results that
were in-line with analyst expectations.

Casino gaming equipment maker International Game Technology
(NYSE: IGT) has beaten the house. The company trumped the
quarterly estimate of $0.63 a share by reporting earnings of
$0.66 before charges. The strong hand was there for the taking.
All one had to do is count cards. Two weeks ago Anchor Gaming
(Nasdaq: SLOT) also topped projections on the hot demand for its
video gaming machines themed to television shows such as
Jeopardy! and I Dream of Jeanie. Those devices are being rolled
out as a joint venture involving both companies. How popular are
IGT's slots and video-gaming machines? The company topped the
billion-dollar mark in revenue this year.

Check out yesterday's Foolish market wrap-up with just one click.
http://www.fool.com/m.asp?i=184236
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