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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (24723)	2/3/2003 1:41:00 PM
From: Frederick Langford	Respond to of 57110

By Johnathan Burns Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Data-networking giant Cisco Systems Inc. (CSCO) is expected to report sales sagged in the fiscal second quarter, mainly on tepid spending by U.S. enterprise customers. The technology bellwether, which will report results after the market close Tuesday, is projected to earn 13 cents a share on revenue or $4.73 billion, compared to 9 cents a share on revenue of $4.82 billion a year ago, according to a Thomson First Call survey of analysts. But earnings per share and sales are expected to be weaker than the fiscal first quarter, as the company has been conservative with its guidance based in part on the overall economy. "Our channel checks throughout the January quarter have indicated a soft U.S. enterprise market, thus leading to our view that U.S. enterprise sales will be down sequentially," said UBS Warburg analyst Nikos Theodosopoulos. The firm has performed investment banking services for the company and a member of the research team or their families owns Cisco shares. Theodosopoulos estimated that 60% to 65% of Cisco's sales come from the enterprise market, with 15% to 20% coming from the service provider segment and about 20% to 25% attributable to the commercial market. As important as the fiscal second-quarter results will be Cisco's guidance for the fiscal year. Wall Street expects the company to earn 13 cents a share in the third quarter on sales of $4.76 billion. Full-year earnings are supposed to be 54 cents a share on revenue of $19.2 billion. "Historically, the April quarter is Cisco's most challenging in its fiscal year," Theodosopoulos wrote in a Monday note. "On top of that, there is the continuing tight capital spending budgets by both enterprises and service providers as we enter 2003. Finally, there is the prospect of a conflict in the Middle East. Thus, we believe Cisco management will likely guide to a flat to slightly down quarter." That would be slightly lower than Wall Street's current fiscal third-quarter estimates. The view is shared by others on Wall Street who expect the company to deliver guidance calling for sequentially flat to down revenue. That will likely keep shares of Cisco trading at current levels without much opportunity for appreciation near-term. Shares are currently at $13.67, up 2.2%, on volume of 43.8 million. Average daily volume is 75.4 million. "While investors clamor for more from (Cisco), the fact remains that Cisco is doing what it can in a challenging environment," said SoundView Technology Group analyst Ryan Molloy. The firm has no investment banking relationship with the company and the analyst owns no Cisco shares. "The company continues to outperform its peers from virtually every angle and its execution is unparalleled." -By Johnathan Burns, Dow Jones Newswires; 201-938-2020; johnathan.burns@dowjones.com (END) Dow Jones Newswires 02-03-03 1332ET