<Thursday September 24, 4:54 pm Eastern Time
Cisco still plans Asia expansion - CEO
WASHINGTON, Sept 24 (Reuters) - Leading computer network equipment maker Cisco Systems Inc. plans to expand its staff
substantially in Asia over the next six months despite the region's current economic crisis, Cisco President John Chambers said on
Thursday.
''I believe you gain market share when you catch markets in transition,'' Chambers said at a conference sponsored by Business Week magazine. Cisco more than
doubled it staff in Asia over the past six months and will add another 30 percent in the next six months, he said.
''Whether their economy recovers in two years or in five years, we'll be positioned well,'' he added.
The company had about 425 staff members in Asia in July, up from 175 at the end of 1997.
Earlier this month, Chambers toured Asia and met with Chinese President Jiang Zemin and leaders in Singapore, Malaysia and Hong Kong.
For the quarter ended July 25, Cisco's sales in the region declined to seven or eight percent of the company's total sales from about 17 percent back in 1997.
Overall sales for the quarter rose 35 percent to $2.4 billion.>>
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imo, with substantial increase in staff compounding the negativity of reduce asia sales (which is not going to pick up soon, although great for the future, may be five yrs later) will very likely reduce the earnings and margin for the asia sector. Also, europe and latin america mkts are weak as we have seen from europoean based telecom and datacom companies, therefore addition to this negativity is europe and latine america softness that unfortunately will not help make up for the loss in asia. What's left are the americas and canada; canada economy is also not doing well; and finally here in US - what we've are all these sector companies lined up and taking serious shots at csco mkts with their latest products that were being developed during the last two yrs - if one sits back and thinks through all of these facts, one will see that csco margin and earnings can be hurt, if not this qtr becasue of backlogs, imo, next qtr. Again, this is the analysis, imo, and in weak mkt conditions, agree with smartmoney magazine buy target price of 46$ |
