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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.11

+0.9%

Nov 21 9:30 AM EST

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To: Eric who wrote (12038)	2/2/1998 9:49:00 PM
From: craig crawford	Read Replies (2) of 77400

<< I was refering to pre-charge earnings, that is simple revenues over shares. >> I understand what your saying, but I was asking if you were talking "basic" earnings (using weighted avg shares outstanding for the quarter) or "diluted" earnings (taking into account future dilutions from stock options, convertables, etc). I don't think "diluted" earnings are considered a charge. Also, the street usually cares about pro-forma earnings, which factor out special charges and gains etc. That's the number the market will be watching. Pro-forma earnings should be higher than net income due to all the charges C$CO takes for their aggressive acquisition strategy. I don't think C$CO will have much trouble meeting estimates considering they are only forecast to rise 23.53%. My argument is that any upside surprise is fully reflected in the price. I still remember John Chambers promise of 30-50% growth. He's allowed to have a couple of slow quarters as long as he grows the company as promised over the long-term. I can't imagine C$CO shareholders will be forgiving of multiple quarters in the low to upper 20% growth range. C$CO better beat estimates and say fiscal Q3 looks good. Don't get me wrong, C$CO is a great company and I have been long far more than I have been short this stock, and most companies C$CO's size would be jealous to have their growth rate, but the price IMO already reflects the most optimistic scenario I can imagine. Who knows what happens if the C$CO doesn't please the street. I must say C$CO always has seemed to quiet the naysayers before. Let's see if they can do it one more time. (Oh. And if I had long-term cap gains like you have Eric I would probably just let it ride as well. C$CO will probably be much higher in 10 years).

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