CNET News: Cisco expects sales slowdownÿ
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ÿÿÿ Cisco expects sales slowdown
ÿÿÿ By Sandeep Junnarkar
ÿÿÿ Staff Writer, CNET News.com
ÿÿÿ December 15, 1999, 5:55 a.m. PTÿ
ÿÿÿ Networking giant Cisco Systems warned that net sales could grow at a lower pace in the future, and that it expected its gross
ÿÿÿ margins to continue declining.
ÿÿÿ In its quarterly 10-Q filing with the Securities and Exchange Commission, Cisco said that its gross margins decreased to 64.8 percent in the first
ÿÿÿ quarter of 2000 from 65.5 percent in the year-ago quarter.ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The decline was primarily due to the company's continued shift toward lower-margin products and persistent pricing
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ pressure from competitors, Cisco said.ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "The prices of component parts have fluctuated in the recent past, and we expect that this trend may continue," the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ company said in its 10-Q filing. "We expect that gross margins will continue to decrease in the future."ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The company cited faster growth in the market for lower-margin remote access and switching products than the market
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ for its higher-margin router and high-performance switching products.ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ While net sales grew to $3.9 billion in the first quarter of 2000 from $2.6 billion in the year-ago quarter, the company
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ expects its growth rate to slow.ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "We expect that in the future, our net sales may grow at a slower rate than experienced in previous periods, and that on
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ a quarter-to-quarter basis our growth in net sales may be significantly lower than our historical quarterly growth rate,"
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Cisco said in its filing.ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ |
