Don't kid yourself. Look at the darling of Wall Street CISCO>>>>>>Cisco More Than Tripled Loss Reserves to $275 Million in Its First Quarter
By Miles Weiss
Washington, Dec. 15 (Bloomberg) -- Cisco Systems Inc., the biggest computer networking equipment maker, set aside $275 million during its first fiscal quarter to cover losses from unpaid customer bills and other items, more than tripling the amount earmarked a year earlier.
The bigger loss reserve, reported in a quarterly filing with the Securities and Exchange Commission, reinforces concerns by some analysts that Cisco and other equipment makers, such as Nortel Networks Corp. and Lucent Technologies Inc., could suffer because of cash shortages at telecommunications carriers and Internet service providers on which they rely for sales.
Cisco has been pushing to sell more networking products to telecommunications carriers, helping the San Jose, California, company keep up the annual sales growth of 50 percent or more that has been among its chief attractions to investors. As some telecommunications customers are running short of cash and having trouble paying suppliers, it has helped build a growing pile of unpaid customer bills.
``In general, Cisco's balance sheet showed a lot more signs of stress than it did the quarter before,'' said Paul Sagawa, an analyst at Bernstein Investment Research & Management.
Cisco shares fell $1.50 to $49.44 in late trading, and have dropped 40 percent since hitting a record $82 on March 27. |
