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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.94+1.1%Nov 28 9:30 AM EST
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To: Techplayer who wrote (27503)8/11/1999 9:52:00 AM
From: Mehitabel  Read Replies (2) of 77400
 
Geotel growth was over 100% when it was bought out by CSCO. Earnings growth was over 80%. AT LEAST.

I doubt very much geotel had anything to do with CSCO earnings growth being below sales growth, as the same was true in the April quarter.

My own personal opinion about why earnings growth is below sales growth is the adding of new employees. CSCO added 1100 new employees in the April quarter, was planning to add 600-900 for the just-reported quarter. New employees add to costs without adding much right away to earnings.

Then, there is also the possibility of R & D expenses, and the potential costs of an aggressive push into the SP market (which seems to have been successful). AND also possible, the "cookie jar" accounting method accounting for part of it.
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