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

To: Vendit™ who wrote (27560)	8/11/1999 8:11:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 77399

_ggggggg- Vendit very cool -g- now if i can find some way to link those sounds to my charts. woib woib woib -g-

To: Vendit™ who wrote (27560)	8/12/1999 12:35:00 PM
From: Tulvio Durand	Respond to of 77399

Earnings could have been as much as 15% upside surprise (ie., $0.23), but CSCO chose to understate earnings in order to embellish next quarter (November) results, according to this article in Street Advisor. Tulvio ^^^^^^^^^^^******** A Look Inside Cisco's Results (NASDAQ: CSCO) August 11, 1999 by Kevin Prigel Firing on all cylinders, plus a few more. That's the only way to describe Cisco's business after last nights earnings release. Sales and earnings were both above consensus estimates, which is to be expected from Cisco, but provides a nice surprise in light of the recent technology selloff. For the quarter sales were up 48%, with net income jumping 38%, and earnings per share up 31%. The growth numbers here are phenomenal, and go a long way towards justifying Cisco's current market busting PE ratio. There could be some concern about margins not holding up. However, thinner margins are acceptable since the long term goal is to dominate the data networking world, and one way to assure that is early adoption. Essentially, the argument among engineers is that Cisco products are nearly impossible to displace once an organization adopts Cisco solutions. That means that beating the competition on price to win short term sales will lead to higher recurring revenues, and steadier margins down the line. Cisco did issue its standard warning that business may not remain as good as it is currently, in the form of a Year 2000 issue. I would contend that Cisco has set themselves up to thoroughly trounce earnings estimates even if revenue growth is only in-line next quarter. How can a company do this you ask? Cisco's quarter was so good that they had quite a bit of "wiggle room" to get to an earnings number that beat the street. Instead of beating estimates by $0.02-$0.03, which was possible, the company appears to have accelerated recognition of certain Research and Development, and Sales and Marketing expenses. This appears to have knocked current quarter earnings down from where they could have been, but will allow Cisco to turn in another solid quarter with the next announcement in November. The Cisco story is as good today as it has ever been. The only element that is unappealing is the price of the stock. Cisco is a must own company, but not extremely compelling at current valuations. If we didn't own Cisco, we'd buy, but as current owner's we will simply hold.