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

To: pass pass who wrote (50290)	3/23/2001 11:14:44 AM
From: JakeStraw	Respond to of 77400

CE Unterberg, Towbin Covers CSCO investor.cnet.com We are significantly reducing our near term revenue and EPS estimates over the near term for Cisco Systems, due to soft capital spending across the enterprise and service provider segments in the U.S. and increasingly in international markets. Our estimates are also reduced for fiscal 2002, mostly due to the impact of nearer term quarterly estimate reductions. For full year fiscal 2002 we now estimate $0.51 EPS (essentially flat year/year), vs. $0.80 previously, on less than 5% revenue growth to $25.5 million and gross margin of 54.7% (based on gross margin stabilizing but not returning to historical levels before the recent near term weakness). We are maintaining our Buy rating (although reducing our target price from $50 to $40) for the time being since we don't view our downward estimate revisions as being driven by any material change in Cisco's competitive position, as much as by the macroeconomic demand uncertainty.

To: pass pass who wrote (50290)	3/23/2001 11:55:50 AM
From: JakeStraw	Read Replies (1) \| Respond to of 77400

investor.cnet.com In response to continued negative news flow in the industry, we are lowering our revenue estimates for the current April quarter to $5.7 billion (16% sequential decline) from $5.9 billion (12% sequential decline) and EPS to $0.09 from $0.11. For F2001, we are lowering our revenue estimate to $24.6 billion from $25.1 billion and EPS estimate to $0.55 from $0.58. For F2002, we are adjusting revenue estimate to $26.3 billion from $27.9 billion and EPS estimate to $0.63 from $0.68. In discussions with well-placed industry sources at the Optical Fiber Conference (OFC) this week, the very challenging industry environment was confirmed and even amplified. Nobody we spoke to believes that service provider spending will improve before the beginning of next year. The component and EMS channel are seeing no relief. All of the major players who sell to Cisco have seen push backs and are talking about lower visibility. Although we have no proprietary knowledge of Cisco's intention to pre-announce results, we intuitively think that revenues at or below $5.6 billion would be the level the company would seriously consider pre-announcing. We tend to think that a pre-announcement would drive the stock to the low to mid-teens. Despite the negative tone of this call, we are maintaining our Strong Buy rating on Cisco Systems. We think that the company's current challenges are almost 100% macro driven and that relative to its large competitors Cisco's issues related to product transitions and execution are minor. We believe that because of excellent positioning, a leaner operation, and strong management, the company will emerge from this industry slowdown with greater and more profitable market share gains.