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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (40079)	8/8/2001 7:19:18 PM
From: stockman_scott	Respond to of 65232

Cisco Off 6.7 Percent on Lack of Guidance Aug 8 6:16pm ET By Ben Klayman CHICAGO (Reuters) - Cisco Systems Inc. , which makes gear that helps power the Internet, saw its stock fall about 6.7 percent on Wednesday after it failed to reassure the markets that the bottom of the slowdown is at hand, analysts said. Cisco's stock closed off $1.28, or 6.65 percent, at $17.98 on the Nasdaq. Over the past year, it has underperformed the Standard & Poor's 500 index by about 61 percent, while outperforming its bedraggled peer group in the American Stock Exchange Networking index by about 7.6 percent. The San Jose, California-based networking giant posted a paltry fourth-quarter net profit of $7 million after the market closed on Tuesday, down 99 percent from the same period last year. Its operating profits were in line with Wall Street expectations. However, Cisco Chief Executive John Chambers failed to provide the guidance investors had hoped for, raising fears the slowdown is far from over, analysts said. "People also wanted to hear that the next quarter was the bottom and (Chambers) said that won't happen for the next one to two quarters," said Shawn Campbell, an analyst with Northern Trust Corp.'s asset management arm. "People really wanted confirmation that things were picking back up," added Campbell, who was disappointed with the lack of guidance by Cisco. The company said its fiscal first-quarter sales would be flat to down 5 percent from the fourth-quarter level of $4.3 billion, but declined to provide guidance for the full 2002 fiscal year, citing continued caution by some U.S. customers as well as tough overseas markets. STOCK TO REMAIN IN SLUMP FOR 2001 "No one really knows when the economy and capital spending will bottom out," Chief Executive John Chambers told analysts on a conference call on Tuesday after the financial results were released. Justin McNichols, portfolio manager with Osborne Partners Capital Management in San Francisco, said the lack of guidance for the next fiscal year likely would mean Cisco's stock will remain in the mid-teens to low-20s price range for the rest of 2001. Any pain related to Cisco was felt across the broader markets as such rivals as Juniper Networks Inc. , Redback Networks Inc. , Foundry Networks Inc. , Ciena Corp. and Sonus Networks Inc. saw their shares decline on Wednesday. However, one investment adviser was critical of investors who had expected Cisco to identify when demand would bottom out and start picking up again. "Anyone who thought it was going to be that had to be smoking something," said Henry Asher, president of the New York-based North Star Group, which owns Cisco shares. "People get emotionally overwrought about finding the elusive bottom." J.P. Morgan H&Q, SG Cowen, Lehman Brothers, Morgan Stanley, C.E. Unterberg, Towbin and UBS Warburg on Wednesday cut their 2002 earnings estimates, and several reduced their price targets for the company's shares. C.E. Unterberg, Towbin analyst Martin Pyykkonen questioned whether Cisco may need to consider additional job cuts by the fall if there is no pick-up in demand or at least a feel for when things will turn around.