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To: Condor who wrote (40340)	11/6/2000 4:10:54 PM
From: Softechie	Respond to of 57584

CNBC's FABER REPORT -2:Cisco Prices Options Grant-Sources -------------------------------------------------------------------------------- DJ CNBC's FABER REPORT -2:Cisco Prices Options Grant-Sources 06 Nov 14:42 The following report was aired Monday on CNBC by reporter David Faber: In each of the last 13 quarters for which it has reported financial results, Cisco Systems Inc. has beaten the consensus per-share estimate for what it would earn by one cent a share. For its first fiscal quarter of 2001, based on the purely anecdotal evidence I'm picking up, the question won't be whether Cisco will match this recent track record, but whether it will exceed it. It is simply not possible to know what Cisco's earnings per share number will be when it is reported after today's close. And it's a dangerous game to try and make investment decisions based on rumors of a better than expected quarter. As is so often the case, the stock's reaction after an earnings announcement is predicated more on what management says about its future financial performance than the numbers it releases that show its past performance. That being said, I've been hearing speculation both within the financial community and in the business sector which Cisco serves that the company had a very strong quarter, and could well report revenue growth of more than 60%, stronger-than-expected margins and a record backlog. Backlog as of Sept. 25 of this year was $3.83 billion, roughly four times that at the same time of 1999. The speculation that Cisco will report a strong quarter is one reason why the stock had a strong week last week. The latest bit of anecdotal evidence supporting that contention comes today from the firm of Morgan Stanley. Its salesmen are telling clients that over the weekend, Cisco priced an options grant for employees. The thinking goes that Cisco wouldn't have priced an options grant off Friday's closing price, unless it had confidence it was a good time to do so for the sake of those employees. A Cisco spokesman has not returned calls to confirm whether the company made an options grant.Previous options grants have proved to be a fairly strong precursor of the stock's ascent. Of course, Cisco has been doing little but ascending until this year, due to an 11-quarter streak of accelerating revenue growth. That remarkable growth, a barometer of the health of the industries that Cisco sells to, is why the company is viewed as so important to the overall stock market. In a year of one blowup after another, Cisco has managed to maintain an accelerating rate of revenue growth. It is that trend which investors will be focused on when Cisco comments on its quarterly performance and the outlook for the future. Analyst Paul Sagawa of Sanford Bernstein, who has been cautious on the telecom equipment group in the belief that capital expenditure spending by telecom carriers will show slower growth, is similarly inclined towards Cisco. The analyst expects that after this quarter Cisco's sales growth will begin to decelerate given competition from the likes of Juniper Networks Inc. in the edge router business and some very difficult year over year comparisons. Cisco has less exposure to spending by telecom carriers that many companies and sells into the highest growth markets of telecom. But Sagawa believes the company's incredible growth has come in part from selling to some of the emerging telecom companies that are now running out of cash. (END) DOW JONES NEWS 11-06-00 02:42 PM