Ted,
We clearly have a difference of opinion and you obviously haven't taken a close look at Cisco's last reported earnings.
As for cooking the books, I don't think so...Intel is way too visible to be doing sh*t like that
I'm not suggesting they are doing anything illegal. I'm just suggesting the style used to report earnings distorts the truth, the same thing that was suggested by Barron's.
You need to check the credentials of the posters on the threads Eric mentioned who are making these claims
They are ALL accountants. This is irrelavent though, I make my own decisions and know how to read a financial statement for myself. We all just happen to share the same opinions, same as all of the AMD supporters. Do I really know if Scumbria, Kash, Petz, Milo, Mani, or you are really who you say you are? Do I really know if any of you know jack about processors? Of course not, I make my own decisions as I think everyone else does as well.
You make the assumption that Intel will stop trading stock next year
No I'm not. I'm assuming they won't be able to repeat the same gains as the first two quarters. If I remember right, Intel only has $.65 of unrealized gains left. Some of that will be used the rest of this year. Ultimately, is this what you really want your high tech investments to depend on? I don't, if Intel's investments don't perform well, earnings next year will suck. Even if the "core" business performs beautifully, they could have earnings down YoY, which will be bad for the stock even though it shouldn't be. Isn't this why financial companies don't trade with P/e's like Intel's?
As for CSCO, what is going on here...are these posters suffering from some kind of tech penis envy
No we aren't suffering "tech penis envy", we just look at the reported financial statements directly from Cisco, which speak for themselves.
Here's what stood out of Cisco's earnings to me. For one, shares increased from 7.2 billion to 7.5 billion. 300,000,000 shares added at today's price is $20 billion in market cap, or more than trailing 12 months REVENUES. In my opinion, this is a form of monetizing shareholder ignorance.
The other thing that stuck out was revenues and OPERATING profit. Directly from Cisco's condensed consolidated statements of operations, revenues ending July 1999 were $3,558,000,000 and ending July 2000 were $5,720,000,000. These are great numbers, up about 60% YoY. Also directly from the same statement we see that operating profit ending July 1999 was $853,000,000 and ending July 2000 was $822,000,000. Operating profits were DOWN YoY. So where did the big profit gains that Cisco reported come from? Well from the same statement we see that "Net gains realized on minority investments" was up $344,000,000 YoY. Also, "Interest and other income" was up $104,000,000 YoY. Also, Cisco's effective tax rate declined YoY because of the way they are allowed to account for aquisitions and employee stock options. I think this should be of grave concern for any Cisco investor as they can sell 60% more product, but need investment gains and tax tricks just to show an improving profit.
As for the Naz, IMO there are two things that can kill it....a major recession, or man invents everything there is to invent and the tech revolution comes to an end.
I'm not suggesting accounting alone will lead to the fall of tech, but it will definitely be a big influence.
regards,
chic |
