Cisco tells SEC provisions for bad customers unchanged
TUESDAY, DECEMBER 19, 2000 2:03:00 PM EST
SAN FRANCISCO, Dec. 19 (Reuters) - Cisco Systems Inc. CSCO confirmed in a filing with the Securities and Exchange Commission on Tuesday that provisions for losses in its first quarter 2001 report totaled $275 million, but the networking equipment giant said increases in reserves were not to guard against fears of nonpaying customers.
The San Jose-based company said it set aside $14 million during the quarter for "doubtful accounts", or customers who may not be able to pay Cisco for products and services provided, in an 8-K filing with the SEC meant to to clarify information in its first quarter 2001 earnings release.
Cisco said the accumulated $57 million reserve was about 1.9 percent of trade accounts receivable, as compared with $43 million, or 1.8 percent of trade accounts receivable, at the end of the fourth quarter 2000.
It said $143 million was set aside by Cisco for losses due to inventory reserves. Cisco has boosted its stockpile of components to keep delivery time to customers fast in case of shortages of parts.
The remaining $118 million was to guard against losses on Cisco's minority investments, especially in start-up companies, according to the filing. At the end of the first quarter 2001, Cisco had an unrealized gain of about $3.8 billion in investments. |
