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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, November 9, 2000

benjamin.rogers@enron.com
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NEWS CORP. REPORTS DROP IN EARNINGS
The company's profits decline due to a ratings downturn at the
Fox TV network.

By Chris Rugaber

Multinational media conglomerate News Corp. (NYSE: NWS) reported
a decline in profits for its fiscal first quarter last night,
thanks to an accounting change and reduced ad revenues from its
Fox TV network.

After-tax operating profit fell to $149 million, or $0.14 per
American depositary receipt (ADR), from $165 million, or $0.16
per ADR, in the year-earlier period. (Like most other non-U.S.
based companies, News Corp. shares trade as ADRs.) The reduced
profits did meet average analysts' estimates. Revenues rose 2.6%
to $3.24 billion.

Thanks to a change in accounting for the company's film
business, News Corp. took a non-cash charge of $417 million,
resulting in a net loss for the quarter of $268 million, or
$0.27 per ADR. All Hollywood studios have been adjusting their
finances to reflect new accounting standards, which affect
marketing and development costs, among other things.

The decline in News Corp.'s operating profits was primarily a
result of lower ratings and advertising revenue for the Fox TV
network, which suffered from the success of CBS's Survivor and
the Olympics on NBC. The No. 4 U.S. network posted an operating
loss of $31 million, compared to $20 million in operating
earnings a year earlier. The network also reported higher
production and marketing costs, which may explain all those
promotions for the new series Dark Angel.

As a result, News Corp.'s separately traded U.S. media
subsidiary, the Fox Entertainment Group (NYSE: FOX), which owns
the television network and the 20th Century Fox film studio,
reported a 16% drop in fiscal first-quarter operating profit.
While the film studio's cash flow almost doubled to $119
million, from $62 million a year ago -- thanks largely to the
success of the movie X-Men -- this did not offset the declines
in television ad revenues.

Overall, profits declined in three of the six operating
divisions of the company -- television, magazines, and newspapers
-- while earnings improved for the movie studio, cable, and publishing
businesses. CEO Rupert Murdoch noted in a conference call that the company
planned to proceed with an IPO of its satellite unit, Sky Global
Networks, in the first calendar quarter of next year.
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NEWS TO GO

The tougher climate for online businesses claimed more
casualties yesterday, as B2B holding company Internet Capital
Group (Nasdaq: ICGE) announced that it would cut 50 jobs, or 35%
of its workforce, and take a charge of $25 million to $30
million to pay for the cuts. The company's shares fell $3.50 in
after-hours trading to $12.75, on top of a 90% drop so far this
year. Investors in the company may be relieved to know that,
according to CEO Walter Buckley, "We're very much moving from a
land grab area to an execution area."

The drama continues at speech-recognition company Lernout &
Hauspie (Nasdaq: LHSP), makers of Dragon and Dictaphone
software, as the company's co-founders stepped down from their
executive positions today. The company will also delay its 10-Q
filing as it restates results for 1998, 1999, and the first half
of this year due to errors the company found in an internal
audit. But wait, there's more bad news: The company also said
that third-quarter revenue would fall short of previous
forecasts by about 24%.

ABC's hit show Who Wants to Be a Millionaire? continues to
reward parent company Disney (NYSE: DIS), which today reported a
fiscal fourth-quarter profit of $167 million, or $0.11 per
share, thanks in part to increased ad sales at ABC. Excluding
the company's Internet properties, Disney earned $0.20 per
share, $0.02 ahead of consensus estimates. The company lost $126
million, or $0.02 per share, in last year's fiscal fourth
quarter. Revenues rose 5.8% to $6.12 billion. For the full year,
the company reported revenue growth of 9% to $25 billion, and
net income of $1.9 billion, or $1.92 per share.

Warren Buffett's holding company Berkshire Hathaway (NYSE:
BRK.A) announced last night that it will purchase paint maker
Benjamin Moore for about $1 billion in cash. Berkshire will pay
$37.82 per share for the company, a 51% premium to yesterday's
closing price. New Jersey-based Benjamin Moore makes home
exterior and interior paints, and is the second housing-related
acquisition for Berkshire in recent months. The company
purchased carpet-maker Shaw Industries in September.
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