I don't mean to seem obtuse, Haim. The financials I looked at were what you posted.
The comparative figures in your post for the two items I mentioned showed the 2000 numbers were multiples of the 1999 numbers. Is CSCO going to be continuing to write off goodwill and in-process purchased R&D from acquisitions at this rate in the future, or is this an unusually high amount?
For example, the in-process R&D I note from the CSCO release is a one-time write-off. That's $461 million off this quarter's bottom line that would otherwise have made the NI a lot better, no? In other words, the acquisition presumably contributed little to their revenue and gross margin but caused a big hit on their expenses.
Of course, if they continue to acquire non-accretive assets (non-acccretive in the short term only, hopefully) then these write-off's could continue each quarter. Is that what the future holds for CSCO? That's what investors should be doing, as you imply, looking at revenues and expenses from continuing operations, as the only predictable, dependable, measurement of their success as a business. So we have to discount the investment gains - who knows if that'll continue? - but should also be careful to understand extraordinary expenses: are they indeed extraordinary, or will they continue because of how CSCO is choosing to run/grow its business?
Not trying to be annoying, just wanting to make sure I understand.
Cheers
WUWT |
