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To: Dealer who wrote (37247)	5/24/2001 11:06:09 AM
From: stockman_scott	Respond to of 65232

Cisco: Unlikely to Repeat Poor Showing Thursday May 24, 6:56 am Eastern Time By Edwin Chan <<SHANGHAI (Reuters) - Cisco is unlikely to see a repeat of its disastrous third quarter, when the world's largest maker of data networking gear posted its first-ever net loss, a senior executive said on Thursday. ``Precipitous'' twin slowdowns in the global economy and telecoms equipment spending took the company and much of the industry by surprise, Rick Justice, Cisco's senior vice president in charge of global sales, told Reuters in an interview. But the Internet gear maker would weather the storm, having taken steps to slash costs -- shedding 6,000 full-time staff -- and focus on exploding markets like China, Justice said. ``About catastrophic drops in the business, we don't foresee that happening,'' he said. ``This is a business where we don't anticipate precipitous drops, because we believe that's already occurred.'' ``Could there be another 100-year flood on top of the last 100-year flood? I suppose. If there's something we've learned from the last time, it's that you'd better be prepared.'' Cisco Chief Executive John Chambers used the flood metaphor in describing the rare nature of the firm's third-quarter loss. The $2.69 billion loss after restructuring charges and excess inventory write-offs followed a 30 percent dive in sales from the second quarter and ended a long streak of 30 to 50 percent growth that had made Cisco a darling of Wall Street. But while Chambers had said earlier this month the technology industry could hit bottom in the next one or two quarters, Justice was more conservative. ``If there's anything you learn from this, it's that you never say never,'' he said. Growing optimism in the United States that an end to the technology malaise was in sight would take time to filter through to the rest of the world, he said. ``Whenever there's an inventory build-up and you go through an economic cycle, it takes a while to flow through.'' GO EAST Justice said Cisco was not sitting around waiting for the global economy to turn around. Of the 8,500 staff the company plans to cut, 6,000 are full-time workers, he said. Cisco would refocus on its most profitable business areas. One that will escape the hatchet is China, Cisco's fastest growing market, which contributed more than $500 million to global revenue of $18.9 billion in fiscal 2000 and is targeted to achieve $1 billion in 2001 sales. ``When you have challenges on a global front, you scan the world for your greatest relative opportunity,'' he said. ``The immediate impact of the global slowdown would be continuing emphasis in China ... as they (tech firms) find themselves no longer in a pure tornado environment of growth and have to be more focused in their efforts.'' China remains a prime destination for foreign networking gear makers due to its massive domestic market, low technology penetration and pressing need to develop telecoms infrastructure. ``Our growth in China is very, very significant and we intend that to be the case going forward. It's well above 50 percent and it's becoming a significant amount of our business,'' he said. Besides China, the Asia-Pacific region accounts for 10 percent of worldwide revenue and Cisco expects sales to grow about 60 percent over the next few years. Cisco has suffered in the United States, where a $500 million quarterly market in service routers for small, local exchange carriers ``vanished overnight,'' Justice said. Demand generated by local carriers who lease lines from big telecommunications firms and repackage them for customers crumbled because of a sudden pullback in venture capital and a lack of recurring revenue, he said. ``Almost overnight people pulled back their investment in that segment. This was a very rapidly growing area for us ... virtually overnight, it disappeared,'' Justice said.>>

To: Dealer who wrote (37247)	5/24/2001 5:11:21 PM
From: stockman_scott	Respond to of 65232

Stocks Rise, Tech Rally Boosts Market Thursday May 24, 4:47 pm Eastern Time By Denise Duclaux <<NEW YORK (Reuters) - Stocks clawed higher on Thursday, with a late-day jump in technology shares lifting the market, as investors kept their sights on an economic recovery and shook off a shift in power in the Senate and fresh data showing a drop in new-home sales. ``You had some news out there earlier that was not entirely favorable -- the Senate shift and the weak home sales -- but I just think there is a lot of money out there and people are hoping they have seen the bottom and the economy is recovering,'' said Ned Collins, a trader at Daiwa Securities America. The Nasdaq Composite Index (.IXIC) jumped 38.54 points, or 1.72 percent, to 2,282.02, after zig-zagging around unchanged much of the session. Internet gear giant Cisco Systems Inc. (NasdaqNM:CSCO - news) led the tech-packed index higher, erasing earlier losses to notch a 55-cent gain to $22.91. The Dow Jones industrial average (.DJI) rose 16.91 points, or 0.15 percent, to 11,122.42, after languishing in negative territory much of the day. Software giant Microsoft Corp. (NasdaqNM:MSFT - news), up $2.02 at $71.72, and computer maker Hewlett-Packard Co. (NYSE:HWP - news), up 51 cents at $30.09, helped to boost the blue-chip gauge. The broad Standard & Poor's 500 Index (.SPX) rose 4.12 points, or 0.32 percent, to 1,293.17, erasing early losses. Investors have been bidding the stock market higher since early April on mounting hopes the Federal Reserve's five steep interest-rate cuts will spark an economic rebound by year end. The major stock indexes hovered close to unchanged during much of Thursday's session, before a modest technology rally boosted the market late in the day. ``There is a bit of a seesaw going on,'' said Charles Lemonides, chief investment officer at M&R Capital Management, which oversees about $275 million. ``More than anything, I think we are just seeing the market adjust to the recent volatility in the market over the past few weeks.'' The market was weighed down in early trading after a government report showed the sales of U.S. homes fell sharply in April -- suggesting the housing market, long a bright spot in a clouded economic picture, may be dimming. The number of new single-family homes sold in April fell 9.5 percent from March -- the largest percentage drop since April 1997. ``Housing has been a real bastion of strength to the market in terms of our feel for what the consumer has been doing,'' said Jeff Kleintop, chief investment strategist with PNC Advisors, which oversees $70 billion. ``This puts a little cloud into that.'' Wall Street digested a widely expected announcement from Vermont Sen. James Jeffords that he was bolting the Republican Party in a move that hands Democrats control of the Senate and threatens President Bush's conservative agenda. The market was struggling to decipher what the move means for the various committees that control legislation affecting sectors like health care or energy, analysts said. The impact of the power shift in the U.S. Senate ``will be industry by industry,'' said Stanley Nabi, chairman of the investment policy committee at Credit Suisse Asset Management. ``It is negative to pharmaceuticals. This is one industry that will be impacted, but it will not have an impact across the board,'' said Nabi, whose firm manages about $100 billion. Among Dow stocks, drug giant Merck & Co. (NYSE:MRK - news) lost $1.50 to $72.50 and Johnson & Johnson (NYSE:JNJ - news) fell 28 cents to $97.45. Drug company Pfizer Inc. (NYSE:PFE - news) declined 63 cents to $42.92. But International Business Machines Corp. (NYSE:IBM - news) perked up $2.12 to $119.52, boosting the Dow. The computer giant signed a deal with software firm i2 Technologies Inc. (NasdaqNM:ITWO - news) to sell software that helps high-tech companies better work with suppliers over the Web, and i2 gained 96.9 cents to $26.829. Structural Dynamics Research Corp. (NasdaqNM:SDRC - news) rallied $6.71 to $24.27 after computer services provider Electronic Data Systems Corp. (NYSE:EDS - news) said it would buy the company for $950 million to create a new business line in computerized product design and manufacturing. EDS lost $2.85 to $61.93. TiVo Inc.(NasdaqNM:TIVO - news) jumped to $8.50, up $3.56, after the company said it had won a patent for technology that enables users to pause and record live television broadcasts. Among the big decliners, Sawtek Inc. (NasdaqNM:SAWS - news) fell $4.86 to $23.39 on the Nasdaq. The wireless parts maker said it expects weak quarterly earnings due to the continued slowdown in the wireless communications sector. Federal Reserve Governor Laurence Meyer, in prepared remarks for a finance seminar in Scotland, said the central bank must look at ``calibrating'' its interest-rate cuts to keep the economy from ``overshooting'' in the other direction, easing borrowing costs so much that they stoked inflationary pressures. But analysts cautioned that Meyer, a known inflation hawk, was perhaps offsetting what was expected to be a positive speech on the economy by Federal Reserve Chairman Alan Greenspan at the Economic Club of New York later on Thursday.>>