***Slightly Off Topic***
Originally when I posted the "Cisco warns," statement, I only could find a small portion of the article referring to this. Well I dug around and found the entire article. It's not quite a "warning." To tell you the truth, I don't know what it is? I still cut it down to make it someone apply to this thread. That good old "A" word is heavily used in this article.
MikeM(From Florida)
>>Cisco's Growth Rate Relies on New Markets and Asia, Chambers Says
San Jose, California, May 29 -- Cisco Systems Inc.'s annual revenue growth will average more than 30 percent in the next three years only if ailing Asian economies rebound or a new market for Cisco's computer networking equipment takes off quickly, analysts and Chief Executive John Chambers said. Chambers has said he expects the company to average 30 percent to 50 percent annual growth over a three- to five-year period. That's higher than the overall industry growth rate, which most analysts peg at around 25 percent through 1999.
Chambers said economic turmoil in Asia has made him ''cautious'' about the next 18 months. Echoing comments he made to analysts during a conference call May 5, he said Cisco would maintain 30 percent to 50 percent growth ''assuming reasonably good economic conditions.'' ''They had been expecting a lot of growth to come from Asia,'' said Jim Cottle, a technology analyst with the University of California Endowment and Employee Pension Fund, which owns more than 2 million Cisco shares.
Still, because of Asia's downturn, Cottle expects the company's revenue to grow 25 percent this year, down from the 31.5 percent it has averaged in the past four quarters.
Slower Orders in Asia
Asian orders, including Japan, accounted for 11 percent of Cisco's bookings in the quarter ended in April, down from 16 percent in the year-earlier period. The company doesn't release a geographic breakdown for revenue, though it does for bookings, which are orders not yet paid for.
Since Cisco released those figures, rioting in Indonesia has worsened that country's economic crisis and nuclear tests in India and Pakistan prompted the U.S. and other countries to impose economic sanctions. The sanctions include eliminating loan guarantees which help Indian companies buy goods from U.S. companies. ''Where economies are having trouble, we're having challenges,'' Chambers said in an interview last week.
On the May 5 call, Chambers said pessimism among the Japanese business community over that country's economic prospects was the worst he had seen in more than a decade of visits there. With Asian sales falling, Cisco is looking for more growth from its two other geographic sales areas: the Americas and Europe, Africa and the Middle East. ''When you're running on three engines and one of them is broken, you've got to make it up with the other two,'' said Martin Pyykkonen, an analyst with CIBC Oppenheimer who rates Cisco ''buy.''
To reach 30 percent growth, Cisco will need an ''uptick'' in Asia and ''a good share'' of the nascent market for networking equipment sold to phone companies and Internet service providers, said Pyykkonen, who pegs Cisco's growth at 28 percent this year.<< |
