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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: red_dog who wrote (58829)	8/31/1999 4:53:00 PM
From: red_dog	Read Replies (1) of 120523

ANALYST(S): BARISH, ANDREW RATING: BUY Download PDF Synopsis: The following synopsis is qualified in its entirety by the more detailed information contained in the full research report, including the discussion of certain risks associated with an investment in this security contained in "Investment Risks." Research dated prior to September 1, 1998 was prepared by an entity that was acquired by BancBoston Robertson Stephens Inc. We are lowering our 3Q estimate (ends this week) for Tricon from $0.66 to $0.63 due to "same-store" sales weakness at KFC and Taco Bell and some impact from high cheese prices. Although our 4Q estimate is going up slightly to account for increased confidence in the new product roll-outs at KFC (chicken sandwiches) and Taco Bell (chalupas) and cheese prices (which appear to be heading quickly lower), 1999 still rounds down to $2.39 (from operations before accounting changes) from $2.40. Our operating estimate for 2000 remains unchanged at $2.80, up 17%. It appears as if the post-Star Wars hangover continued to hurt the results of Taco Bell and KFC (deteriorated from flattish to negative 2% or so in last couple of weeks as Popcorn Chicken promotion failed to move sales), which will both be negative for the quarter. Pizza Hut will likely register a mid-single digit comp increase. The news should be better in the 4Q, particularly with cheese price declines expected and big product news at KFC and Taco Bell. The company is expecting mid-to-high single digit "comp" increases at KFC (driven by the September launch of chicken sandwiches) and low-to-mid single digit gains at Taco Bell (the fried gordita, Chalupas, rolls in late-September) and Pizza Hut (currently promoting an $8.99 "value" price on the one topping Big New Yorker and Stuffed Crust after that).

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