Has this already been posted ?: Cisco Sees Slower Growth Rates
(03/09/98; 12:06 p.m. EST)
By Larry Dignan, TechInvestor
In a filing with the Securities and Exchange Commission Monday, Cisco said it sees slower growth rates as sales to small- to midsized businesses outpace its high-end products and Asia remains a question.
Cisco [CSCO] reported strong second quarter earnings, but is in a traditionally slow quarter, where backlog is reduced. Wall Street is expecting the San Jose, Calif., networking giant to report third quarter earnings of 44 cents a share.
"The company expects that in the future, its net sales may grow at a slower rate than was experienced inprevious periods, and that on a quarter-to-quarter basis, the company's growth in net sales may be significantly lower than its historical quarterly growth rate," Cisco said. "In recent quarters, the sequential sales growth has slowed from prior levels, and a disproportionate share of the sales has occurred in the last month of the quarter.
"The sales growth rate for lower-priced access and switching products targeted toward small and medium-sized businesses has increased faster than that of the company's high-end core router products," the company said. "These products typically carry lower average selling prices, and thus have slowed the company's growth rate vs. the second quarter of last year. Some of the company's more established product lines, such as the Cisco 2500 product family, have experienced decelerating growth rates."
In addition, Cisco forecast slower sales in Asia, but said the company hasn't been hurt by the financial problems abroad yet. "The company anticipates sales in Asia will remain weak in the near future," Cisco said.
"If the economic conditions in these markets worsen, or if these unfavorable conditions result in a wider regional or global economic slowdown, this may have a material adverse impact on the company's business, operations, and financial condition. The company continues to monitor activity in the region closely," the company said.
Europe could also be a problem for Cisco, the company said. Cisco said it recently expanded its operations in Europe and "expects to see an increase in exposures related to non-dollar-denominated sales in several European currencies."
The company said it will hedge currencies to minimize fluctuations.
(CMPnet: techweb.com
|
