Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Stock Farmer who wrote (51437)	4/16/2001 9:26:54 AM
From: Dave	Read Replies (1) \| Respond to of 77398

John, Thanks for replying. I need to look at your numbers and do the calculations on paper. One comment, however. With respect to this point, CSCO has a spot PE of 50 and infinite PEG. Which isn't a strong "buy the company" endorsement. When one looks at PEG, one doesn't compare growth QoQ, but over a longer term horizon, perhaps a year or two. With most tech companies saying that they have "zero visiblity" I agree at this point in time that Cisco has perhaps an infinite PEG, but I think most companies (tech and non-tech) probably are facing the same predicament. dave

To: Stock Farmer who wrote (51437)	4/16/2001 9:39:06 AM
From: Dave	Read Replies (1) \| Respond to of 77398

John, While I pretty much agree with your numbers, Cisco might try to pull an "Intel", meaning that they will say investment gains are "recurring", thus that could push up their pro-forma net income. With respect to the deduction for less payroll (~300M), perhaps that will occur next Q. They are starting the layoffs this Q. GAAP EBIT: 2.6 B$ GM - 2.38 B$ Opex + 0.3 B$ IG = 0.82 ($0.11/share) ProF EBIT: 2.6 B$ GM - 1.98 B$ Opex = 0.62 B$ ($0.09/share) For GAAP, I get .52B. If Cisco starts to say that their "portfolio of investments" are in fact, recurring, on could get pro-forma NI of .92B

To: Stock Farmer who wrote (51437)	4/16/2001 11:38:31 AM
From: RetiredNow	Read Replies (2) \| Respond to of 77398

I'd be more inclined to say revenues will come in at or near $6B rather than $6.8. In addition, I think GM will not decrease from 63% last quarter to 38% this quarter. Instead, I think we will see GM at 55% or higher. Remember, writeoffs of inventory don't hit COGS. They are extraordinary charges. Also, everyone thinks R&D is only from acquisitions, but this is incorrect. 1/3 to 1/2 of Cisco's R&D is internal. The rest is from acquisitions, so we'll have lower net income from more R&D than you guessed. Finally, I don't know what the tax benefits of all these one time charges will be, but I bet it reduces their taxable income, so the tax hit will go below their normal average rate. TTYL!