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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (13959)	11/6/2002 6:00:43 PM
From: augieboo	Respond to of 30712

Zeev on CSCO earnings <snip> As for CSCO. Nice paint. The fact is that their cash and investments are down $300 MM this quarter. Another interesting fact is their cost of goods are down some 280 MM relative to last year while their sales are up some more than $400 MM. How can that be? Well they took a massive "one time" charge to inventory few quarters back, and they are putting this inventory into products, now, of course, at zero cost (they did the same trick last quarter of course). I don't think this report is particularly good. The top line is stalled and the accounting games, are no appreciated by me. investorshub.com ------------------------ Actually, it is even worse, if you look at the P&L statement for last year, their true COGS were $2.046 B (including $290 inventory "benefit" of inventory swing, after auditing, of course), on sales of $4.448 B. This quarter their COGS (not audited yet, you'll see some $400 MM in "inventory benefits", once they audit) are $1.407 B on sales of $4,845. Are you telling me that their gross margins have gone from 54% to 70% because of wringing waste out? Management should fired if they had so much waste to start with, but CSCO never ever had gross margins at 70%, why is not a single analyst asking "Are you expecting 69.3% gross margins going forward?". Are these analysts blind? investorshub.com --------------------------------- I think that analysts are finally seeing the absurdity of gross margins at 70%, CSCO is back at $13.00, maybe should go for another pump to $13.75? (g). Neh, if it drops back under $13, I may consider it. investorshub.com