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. |
