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

To: SouthFloridaGuy who wrote (49875)	3/12/2001 9:57:02 PM
From: Razorbak	Respond to of 77397

"Cisco Hits Two-Year Low After Layoff News" NYCB: You'll get a kick out of the quote at the bottom. Mar 12 4:56pm ET By Ben Klayman CHICAGO (Reuters) - Cisco Systems Inc. , the No. 1 maker of networking equipment for the Internet, on Monday saw its stock fall to its lowest level in more than two years after analysts cut estimates following last week's news of layoffs. The New Economy's bellwether stock closed off 8.79 percent, or $1-13/16, at $18-13/16 in Nasdaq trading, its lowest price since November 1998. Its previous 52-week low was $20-5/16, while it hit its all-time high of $82 last March. Over the past year, the Internet infrastructure equipment company's stock has slightly outperformed the Nasdaq 100 Index. Reuters learned and Cisco confirmed on Friday that the company would lay off as much as 11 percent, or 5,000, of its 44,000 workers. Cisco Chief Executive John Chambers said any pick-up in customer demand and capital spending could be far off. Cisco missed analysts' earnings expectations for the first time in more than six years when it reported fiscal second-quarter results on Feb. 6. Even though it missed forecasts, Cisco's second-quarter profit still surged 48 percent and sales rose 55 percent from the year-ago period. Only last year, Cisco was the focus of speculation it would pass General Electric Co. and Microsoft Corp. as the world's most valuable company by market capitalization and become the world's first trillion-dollar company. Cisco was briefly No. 1 last March, sporting a value of about $550 billion, but its value has plunged to about $130 billion. It doesn't even make the top 10 now. "Good companies selling at high valuations are not immune in this market. It is the high valuation of Cisco that's dragging the stock down," said Tim Ghriskey, senior portfolio manager with mutual fund company Dreyfus Corp. THINGS COULD GET WORSE Analysts and mutual fund managers said things could still get worse. "In the past Cisco was growing, crushing their competitors and had a high return on capital," said Robertson Stephens analyst Paul Johnson, who added the stock could sink as low as $10 a share. "In the current environment, they're not growing, they're not crushing their competitors any longer and they have a significantly weaker return on capital." Johnson cut his rating on Cisco to market performer from long-term attractive and said the company appears to be "a mere shadow of its former self." He and Credit Suisse First Boston analyst Lissa Bogaty also reduced their fiscal 2001 and 2002 earnings estimates. Cisco's struggles are not rare as the high-tech sector has slowed along with the U.S. economy. Such giants as Nortel Networks Corp. , Lucent Technologies Inc. and JDS Uniphase Corp. have announced large job cuts as their businesses have slowed. "Investors now and fund managers are realizing that trouble in tech and telecom sectors are there to stay for quite some time," said Stephen Gauthier, manager of the National Bank Global Technologies Fund in Montreal. "A few weeks back people thought the first half would be difficult and the second half could be better. Now they're realizing it could be the whole year (before things improve)," he added. "Investors are adjusting their portfolios accordingly and selling tech stocks." Larry Seibert, portfolio manager with New York money manager Barrett Associates, said things will likely get worse for Cisco and the rest of the market, but the networking giant's stock is starting to look more attractive. "If you had said at any point along the way, where should Cisco go to -- $50? $40? $30? $20? My God, would the thing go to $10? At $10, we should all take a second mortgage," he joked. siliconinvestor.com