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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (27517)	8/11/1999 10:41:00 AM
From: Zoltan!	Respond to of 77400

Cisco wins applause as sales boom By Cecily Fraser, CBS MarketWatch Last Update: 9:55 AM ET Aug 11, 1999 NewsWatch SAN JOSE, Calif. (CBS.MW) -- Wall Street bid up shares of Cisco Systems 5 percent Wednesday morning, applauding news that a 48 percent boom in Internet-fueled sales lifted the world's largest computer networking company past analysts' fourth-quarter earnings estimates. Updated: 8/11/99 9:56:04 AM ET "The juggernaut remains unstoppable," analyst Paul Weinstein of Credit Suisse First Boston said in a note to clients following the earnings report. Cisco's stock (CSCO: news, msgs) climbed 3 1/8 to 61 13/16, with more than 5 million shares changing hands in early trading. The San Jose, Calif.-based company said pro forma net income totaled $727 million, or 21 cents a share, excluding charges. Analysts surveyed by First Call were expecting a 20-cent profit. A year ago, Cisco's pro forma net income was $525 million, or 16 cents a share, adjusted for two stock splits. "By providing the systems that make the Internet work, Cisco is playing a major role in helping customers thrive in the explosive Internet economy," Chief Executive John Chambers said in a statement. Cisco sales sizzle Revenue for the quarter leaped to $3.55 billion from $2.4 billion, the sixth consecutive quarter that sales growth has accelerated from the year-earlier period. Cisco increased sales to telecommunications firms looking to boost Internet capabilities. The company said it's processing almost $1 billion a month in online orders. "Overall we're pleased," said senior equity analyst David Soetebier at Bank of America Investment Management. "We like to take a long-term approach to these investments and we believe Cisco did improve their competitive position in the quarter." Service provider market The service provider marketplace made up of Internet-related gear, such as high-end carrier routers, remote access and LAN switching, has experienced year-over-year growth over 80 percent, the company said. "Not only is the Web driving Cisco's growth, they proved that they can use it very well.," said Soetebier. "That's a way they can keep margins up, reduce their selling expenses and it gives them a good way to meet any competition they might see from those other factors." Gross margins, Cisco said, will continue to slide over time. For the fourth quarter, gross margin was 64.7 percent, down from 65.1 percent last quarter, squeezed by product mix variances and pricing pressure from competitors, the company reported. But, Cisco also hopes to benefit from a pact with consultant KPMG. On Monday, Cisco said it'll invest more than $1 billion in the firm in an effort to help the firm expand into the Internet business. See full story. "The history has been great, and they have done competitive damage to their immediate peers," said CIBC World Markets analyst Martin Pyykkonen. "They (Cisco) have dominated the enterprise market, and are growing very fast in the service provider market because there is a lot of demand." cbs.marketwatch.com