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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.42

+4.6%

Nov 13 3:59 PM EST

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To: bambs who wrote (51426)	4/15/2001 10:41:41 PM
From: Stock Farmer	Read Replies (2) of 77398

Great question. CSCO +'ve or -'ve? Really, it depends entirely on what the financial engineers want to do. I see the business is very close to the red by GAAP. Here's why: Revenue flat QonQ. No room to push on inventory, so COGS+inventory writedown goes up maybe $1B for effective GM in range 3 B$. Opex+restructuring charge = flat, down on D&A by 250 M$ reflecting reduced IP R&D writedown gets us net of tax within 300 M$ of redline plus or minus 200 M$. That's pretty close. However, taken as "pro-forma"... well, I see about 1.4 B$ worth of "one time" stuff to chuck out in the pro-forma, to show $0.19 or "flat" pro-forma earnings and fool the people all the way to the shearing shed. So, although I'm whistling in the dark here, I'd say close to flat, but black, on GAAP and healthy black pro-forma. We'll all know soon enough. John.

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