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

To: Wyätt Gwyön who wrote (47289)	1/29/2001 10:12:52 AM
From: The Phoenix	Read Replies (1) \| Respond to of 77400

MM, Let me see if I can help. Well, the line before was the inventory buildup was good because they were stockpiling supply-constrained components (please ignore the illogic of stockpiling something you can't get enough of). I read this as CSCO was buying more than they need today (reducing supply to competitors) so that they could address expected demand tomrrow. So now it is a good thing that they are unstockpiling. I don't know about you, but I'm confused. Well, I don't think this is a perception that Cisco created. I think the analysts suggested that stockpiling is a bad thing so the unstockpiling should be a good thing. Of course CSCO had the opposite view.... and it should be made clear that CSCO stated the following. - In Q42000 they said inventories would be increased to accomodate demand and smooth delivery - In Q12001 inventories indeed increased and the analyst community acted surprised. Duh! CSCO went on to again remind them that this was temporary and neccessary due to supply contraints - In Q22001 inventories remained high (maybe even increased) and CSCO stated again this was temporary and was to meet demand. CSCO went on further to say that this invetory would be decreased in the coming quarter. The analysts acted surprised. Duh again! CSCO has been telegraphing the investment community all along. - Now PMCS sees order reducings and less than 1 book to bill - given CSCO's previous suggestion that inventories would be decreased this should not be a surprise... Duh.. apparently it is... - Now the analysts seem to think this is all a bad thing. If you go back to Q42000 CSCO stated clearly this is what they were going to do. They stated they would increased inventory - Temporarily to address demand. They are now working down that inventory...... just as CSCO said they would do. Are you surprised??? OG