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

To: Eric L who wrote (42712)	11/7/2000 4:31:11 AM
From: Mephisto	Read Replies (1) \| Respond to of 77400

Yep! CSCO kicks ZINGA! Cisco Beats Estimates By Eric Lai Cisco Systems Inc. the world's biggest provider of network equipment, on Monday quieted concerns about slowing growth by topping Wall Street estimates again for its first quarter 2001, and trumpeting a rosy outlook for the rest of the year. The company reported profit before one-time items rose 67 percent to $1.36 billion, or 18 cents a share, for its fiscal first quarter ended Oct. 28 from $814 million, or 11 cents per share, in the year ago quarter. Analysts had expected Cisco to report pro forma earnings of 17 cents a share, according to First Call/Thomson. Sales, which had been widely watched for signs of a slowdown, rose year-on-year 66 percent to $6.52 billion from $3.92 billion, topping Wall Street expectations of sales between $6.3 billion and $6.5 billion. "I could not be more pleased with our first quarter, especially compared with what many of our peers have experienced," John Chambers, chief executive officer, said. It was the eighth consecutive quarter of double-digit sales growth versus a year ago and the 11th consecutive quarter of accelerating revenue growth year over year. Chambers said the company's strong sales in many different product lines gives it ``balance'' that competitors lack. Cisco's sales to both large corporations and small businesses grew more than 20 percent in the first quarter 2001 over the fourth quarter, 2000. Sales to telecom service providers, which analysts have pointed to as an industry-wide trouble spot, grew sequentially only in the ``high single digits'' in the first quarter over the fourth quarter the previous year. Year-on-year growth, however, still exceeded 50 percent. Cisco has proven a master at growing its business at a fast clip -- an average of 30 percent to 50 percent annual revenue growth in the last few years -- while managing Wall Street's expectations. Cisco has repeatedly topped analysts' consensus estimates on earnings per share by 1 cent. ``There was nothing to pick on,'' Michael Cristinziano, analyst at Gerard Klauer Mattison, said, who raised his fiscal year 2001 earnings estimates to 80 cents from 75 cents, and to $1.04 from 94 cents in 2002. ``They got MORE CONSERVATIVE IN THEIR ACCOUNTING AND STILL BLEW AWAY THE NUMBERS'' he said. (At this point, I'd forget about the negative Barrons article-MEPHISTO) Cisco sees sales for fiscal year 2001 to rise 50 to 60 percent over 2000. Dismissing signs of a slowdown, Cisco Chief Financial Officer Larry Carter said sales will rise ``high single digits to low double digits'' in the second quarter from the first quarter this year. One analyst remained concerned that Cisco would be affected by the same slowing demand that other network equipment vendors -- most notably Nortel Networks Corp. -- have reported. "I don't think Cisco has as much visibility into the next two to three quarters as they would like. They're putting a brave face forward,'' said Paul Sagawa, analyst with Sanford Bernstein, who says Cisco's rate of earnings growth will ''decelerate". (Is Mr. Sagawa another Wall Street Jackal who claims that he knows more about CSCO than CSCO's executives?)-MEPHISTO *************************************************** Back to CSCO EARNINGS: Actual net income, including $565 million in acquisition charges and other items, was $798 million, or 11 cents per share. In the telecom service provider market, Cisco cited market research figures giving it 10 percent of the market, behind only Nortel (NYSE:NT - news) and Lucent Technologies Inc. (NYSE:LU - news). Chambers said that its slowed sales growth in that sector is only a temporary blip. ``If we execute well, we can break away from competitors just like we did in the enterprise market,'' he said, adding in an interview that ``Nortel and Lucent are visibly tripping.'' By product type, routers and switches each comprised 43 percent of Cisco's sales. Optical networking equipment revenues, sold mostly to service providers, grew year on year 500 percent.** Cisco is expecting to sell $3 to $7 billion worth of optical networking equipment in calendar 2001. Chambers said that as corporate chief executives become more involved in buying networking gear, the market will continue to shift toward companies like Cisco which could provide a broad range of products, rather than a narrower selection that Chambers said is true of his competitors. He also said that Cisco, with more than 38,000 employees worldwide, still fostered a competitive culture. ``We have a healthy paranoia that makes Andy Grove look relaxed,'' he said. biz.yahoo.com