Pew: "Cisco Shares Fall After Company Fails to Split Stock. (Punks selling!)
San Jose, California, Feb. 3 (Bloomberg) -- Shares of Cisco
Systems Inc., the No. 1 computer-networking company, fell as much
as 3.9 percent after fiscal second-quarter earnings topped
forecasts by just a penny and the company failed to unveil a
stock split, as some investors expected.
Cisco fell as much as 4 39/64 to 108 in early U.S. trading.
Cisco's German shares fell 5 euros ($5.65) to 96.5. The company
yesterday reported profit before charges for the quarter ended
Jan. 23 rose 33 percent, to $606 million, or 36 cents a share.
Analysts polled by First Call Corp. expected 35 cents.
Cisco's shares have risen 21 percent this year, touching a
record 117 1/2 Monday as investors bet that strong earnings would
prompt the company to set its eighth stock split since 1991.
''The stock has had a good run and some people are
disappointed it didn't split,'' said Paul Johnson, an analyst
with BancBoston Robertson Stephens who rates Cisco ''buy.''
Further, Cisco trades at 94 times recent earnings, making it
more expensive than No. 2 networking company 3Com Corp. as well
as high-tech bellwethers including No. 1 computer-chip maker
Intel Corp., which trades at about 37 times earnings.
''Valuations are very high and there's no room for
disappointment,'' said Trudbert Merkel, who manages about 8
billion marks ($4.8 billion) at Deka Deutsche
Kapitalanlagegesellschaft. ''It'll be difficult for those stocks
with higher valuations.''
Revenue at the San Jose, California, company surged 40
percent, more than analysts expected, to $2.83 billion from $2.02
billion.
In the year-earlier period, net income was $457.3 million,
or 29 cents. |
