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

To: GVTucker who wrote (47890)	2/5/2001 9:09:44 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77400

GV, Note that there is a lot of discretion in the numbers in that item. If increasing bad accounts would cause CSCO to miss its estimates, I bet that they would keep that number low and try to make it up the next quarter. I guess we'll know soon enough. The addition to bad-debt reserve last quarter was $14 million. Will it be higher this time 'round? That is the question Barron's asks. I agree they have a lot of flexibility on a quarterly basis in "making" their numbers. All those paper gains that can be realized at the drop of a hat for one thing. So investors shouldn't obsess about meaningless quarter-to-quarter fluctuations, but of course they do. And of course certain managements feed this obsession by "smoothing" volatile operating earnings with financial engineering. I think the theory behind this is that investors will pay a premium for "predictability". I guess that will hold as long as they don't apply an offsetting discount for low "earnings quality".