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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.07-1.1%3:59 PM EST
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To: RetiredNow who wrote (57211)2/7/2002 9:04:33 AM
From: GVTucker  Read Replies (1) of 77400
 
mindmeld, RE: That's normal accounting. If the product is shipped, you book the revenue. So what's the problem here? If I sell you a computer and ship it FOB shipping point, you take ownership the minute it leaves my hands. That means that it is a revenue to me at that point. That's what Cisco is doing here, and it's perfectly legal and logical.

I never stated that anything was even remotely illegal or illogical. And you must have misread what I said.

Here's the part that you quoted yourself: $200mm of revenue was booked on contingent contracts that related to products shipped earlier

The point was that the product shipped in earlier quarters, but the revenue wasn't recognized until last quarter. The reason for this accounting is sound, but the point is that when you look at actual demand trend, it isn't as good as it seems when you just look at revenues. Book to bill was 1.0, but if you look at product book to bill, it is under 1.0. So demand isn't improving.
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