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

To: t2 who wrote (52535)	5/8/2001 7:06:28 PM
From: Herschel Rubin	Respond to of 77397

CSCO CC Notes from Briefing.com Updated: 08-May-01 AFTER THE CLOSE Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Q&A dragging on without any new revelations. It's amazing how little we learned on this call: guidance for the Jul qtr didn't change, there was no useful guidance for FY02, and there were indications that both the enterprise and service providers businesses were still declining. In short, no new bad news, but perhaps more importantly, none of the recent hints of good news on the enterprise front were validated by Cisco. It looks like we're in for another quarter of waiting, with few positive catalysts. Stock remains lower after hours at 19.75. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Despite Morgan Stanley's optimism on the enterprise front this morning, we aren't hearing it from Chambers this afternoon; he notes continued pressure on enterprise spending in some key sectors (high tech, financial, manufacturing), and avoids saying that he has seen any improvement in enterprise business. Stock at 19.65. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Regarding the options pricing issue, Chambers says that Cisco does not reprice options. As for new options, Cisco still expects to issue options in the May time period, with the price to be determined after the market has digested the earnings report. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Further guidance for the July quarter: gross margins will remain in the low-mid 50% range. Company refuses to offer any FY02 guidance, but does say that revenues will likely be in the relatively wide range of current analysts' estimates. Q&A now beginning. Stock about 1 pt lower after hours at 19.70. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Cisco sees July qtr revenues flat to down 10% -- same guidance as offered with the April 16 preannouncement. Company is assuming that capex will stabilize in Asia and that consumer spending in the US will not deteriorate significantly. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Finally...guidance: Cisco does see a number of positive indications that suggest a bottom is possible in the next 1-2 quarters, but cautions concerning low visibility. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Chambers defends his 30-50% long-term growth projections for Cisco's markets, but doesn't offer any compelling new evidence for the forecast. Stock has been fading throughout the call; now at 19.62. Still no guidance... Cisco Systems (CSCO) 20.61 +1.36: -- Update -- CFO offers more detail on inventory writedown of $2.25 bln; biggest chunk of inventory was in non-memory semis, such as ASICs and DSPs ($900 mln), then optical components ($450 mln), and memory products such as SRAM and flash ($300 mln). Cisco says most inventories are customized for Cisco and the others have little market value and therefore does not expect to achieve significant income from selling its excess. Finally, Cisco allays fears of future accounting gimmicks by noting that the excess inventories are stored and tracked separately, and if they are used in the future, they will not benefit pro forma earnings numbers. Cisco Systems (CSCO) 20.61 +1.36: -- Update -- Still no guidance, but more color from Chambers: April qtr "ended up pretty much as we outlined." Regarding geographies, Chambers said US service provider sales were down in excess of 40% sequentially, enterprise -20%. On Europe, Chambers said that Cisco has seen a "dramatic change since the February timeframe." On Asia, Japan was down about 33% sequentially, with China and India being the lone bright spots.