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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

3:59 PM EST

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To: jach who wrote (23531)	3/13/1999 12:43:00 PM
From: jach	Read Replies (3) of 77399

These numbers indicate margins are in fact going to suffer, not good for CSCO in the long run. IMO, a revenue slow down like ORCL can potentially cut its price by 30$ in one day. Sales and Mkt increased to 20% from 17.9%. That's a big jump. From two recent 10Q reports -------------- extract from March 10Q Sales and marketing expenses increased by $207 million in the second quarter of 1999 over the second quarter of 1998, and increased $387 million in the first six months of 1999 over the first six months of 1998. This represents an increase from 18.0% to 20.2% of net sales for the quarter to quarter period and from 17.9% to 20.0% for the first six months of each fiscal year. The increase is due principally to an increase in the size of the Company's direct sales force and its commissions, additional marketing and advertising costs associated with the introduction of new products and the expansion of distribution channels. The increase also reflects the Company's efforts to invest in certain key areas such as expansion of its end-to-end strategy and service provider coverage in order to position itself to take advantage of future market opportunities. ------------ extract from last December 10Q Sales and marketing expenses increased by $180 million in the first quarter of 1999 over the first quarter of 1998, an increase to 19.9% from 17.9% of net sales. The increase is due principally to an increase in the size of the Company's direct sales force and its commissions, additional marketing and advertising costs associated with the introduction of new products and the expansion of distribution channels. The increase also reflects the Company's efforts to invest in certain key areas such as expansion of its end-to-end strategy and service provider coverage in order to position itself to take advantage of future market opportunities.

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