CSCO
note they spent almost all their cash flow to buy back their stock. Had that not happened, the EPS would be lowered (7% reduction in outstanding stock) After cashing out his stock options in Nov 2003 (those in lieu of his pays) now Chambers decided to take salary instead. Is there a lesson somewhere ?
17:42 CSCO Cisco Systems: Conference Call Summary II (20.46 +0.41) -- Update --
What is interesting about the CSCO earnings is that the company clearly feels that they have turned the corner out of what was a tough environment. CEO is taking a salary for the first time since May 2001, and new initiatives have started to take hold. Its advanced technologies business (which includes IP phones, storage and security among others) are the future drivers of CSCO. However, the conservative 0%-2% growth in the coming quarter is what is being focused on. The future is less cloudy for CSCO, but with guidance coming in below the street and margins continuing to slip ever so slightly, investors have decided to hold off on CSCO until the numbers actually match the co's optimism.... CSCO trading at $19.22 in after hours, down 6%
17:28 CSCO Cisco Systems: Conference Call Summary (20.46 +0.41)
On call, co guided revs to up 0-2% sequentially (consensus +2.9%) and says sees Gross Margins of 67-68%... Mgmt notes that they were pleased with revenue and order growth in a number of product and geographic areas. Co is focused on gross and profit margins while noting that gross margins were lower from last quarter. Co repurchased $2B in stock for the year. Can still repurchase $8B, and since inception of buyback, shares outstanding have decreased more than 7%. Bookings grew slightly faster than revenue in the qtr, but slower than the previous year. Mgmt notes that quarter was linear. Switches accounted for 41% of total revenue, while Routers accounted for 24% of total revs. Sales discounts and increase in inventories contributed to the lower Gross Margins. F3Q04 had an extra week, which was noted several times for apples to apples comps. Product book to bill was 1 for the quarter. Product backlog was $1.9B at end of FY04 compared to $2.0B in FY03. DSO's were 28, up from 27 the previous quarter. Inventory increases were higher due to work in process and higher finished goods (Linksys was noted as having high inventory ahead of the back to school season). Since May 2001, CEO has had salary of $1.00 with no bonus per year; effective August 1, 2004 the salary moved to $350,000. Co saw normal seasonality in all geographic regions. "Australia had an outstanding quarter." India is seeing 100% growth year over year. Co shipped 470K IP phones and took orders for over 500K... CSCO trading at $19.13 in after hours |
