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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (34353)	11/5/2000 8:21:42 AM
From: Bruce Brown	Read Replies (3) \| Respond to of 54805

A few important things to remember about Cisco and their quarterly earnings. They have an amazing string of quarterly reports going that have not disappointed or at least have always met expectations. Crack open that 2000 annual report we all just received and read the little box on page 4: • Five years ago it took Cisco 14 days to close its books each quarter. Now, with the "virtual close," using powerful Internet technology, Cisco executives have real-time, daily access to company financial information, empowering them and their employees to instantly react to market shifts and changing business requirements. That's nice. We can assume that with such a close tab at any given moment, there was no need for the company to issue a warning or they would have done so. Anything can happen, but we have to assume that Chambers public mention on several occasions of being comfortable with their forecasted growth range that things are on track. Back in August, Phil Weiss wrote a column about Cisco's change in cash flow which one might want to review to see what investors are looking at as the quarterly report comes out tomorrow: fool.com And here was the initial summary of their previous quarter's earnings: fool.com There are issues to be watching for in their quarterly report in terms of the inventory control, DSO's, account receivables, etc..., but it's the guidance they give for the future that everyone will be hanging on to the edge of their seats to hear. Although that's a shorter term concern, the reality is the market focuses too much on that. I would expect to hear some issues on increased inventory at the front of the quarter due to concerns they didn't want to face shortage components later in the quarter. Why do I expect this? Because we heard it from other players in the field like Redback, Extreme, Juniper, Foundry, etc... . Once again, that's only a minor short term consideration as the start of Q3 did present some component shortage issues which worked themselves out, but created enough concern for companies to build inventory to prevent facing shortages and the worry of not meeting customer demand. BB