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: RetiredNow who wrote (57211)	2/7/2002 8:48:49 AM
From: JakeStraw	Read Replies (1) \| Respond to of 77400

>>If the product is shipped, you book the revenue. Isn't that how Compaq got into trouble? Weren't they booking sales to their distributors as revenue? IOW they were stuffing the pipeline.

To: RetiredNow who wrote (57211)	2/7/2002 9:04:33 AM
From: GVTucker	Read Replies (1) \| Respond to of 77400

mindmeld, RE: That's normal accounting. If the product is shipped, you book the revenue. So what's the problem here? If I sell you a computer and ship it FOB shipping point, you take ownership the minute it leaves my hands. That means that it is a revenue to me at that point. That's what Cisco is doing here, and it's perfectly legal and logical. I never stated that anything was even remotely illegal or illogical. And you must have misread what I said. Here's the part that you quoted yourself: $200mm of revenue was booked on contingent contracts that related to products shipped earlier The point was that the product shipped in earlier quarters, but the revenue wasn't recognized until last quarter. The reason for this accounting is sound, but the point is that when you look at actual demand trend, it isn't as good as it seems when you just look at revenues. Book to bill was 1.0, but if you look at product book to bill, it is under 1.0. So demand isn't improving.