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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 72.34

-2.9%

Nov 4 3:59 PM EST

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To: Mark Peterson CPA who wrote (21918)	2/3/1999 9:28:00 PM
From: JC Reddy	Read Replies (1) of 77397

Look at Fleckensten's (www.stocksite.com) cumulative calculations... CSCO has earned a total of $2.95/share over the last 15 years. This puts a 37 P/E on trailing "15 Years of Earnings" which is amazing! Here is a statement from earnings report: "During the second quarter of fiscal 1999, Cisco acquired Summa Four, Inc., Clarity Wireless Corporation, Selsius Systems, Inc., and PipeLinks, Inc. for a combined purchase price of approximately $537 million and took a one-time charge of $349 million or $0.19 per share on an after-tax basis as a write-off of in-process R&D." Write-off of about $349 million. It only a matter of $30 million to show 1 cent above expectations vs. 1 cent below. I don't even think they paid these acquired companies in cash - it was a stock transaction. FYI, I have no position in CSCO, but continue to wonder how these lofty levels are justified. I keep thinking it ought to come down, but it keeps going up. I need to understand! :-)

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