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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (65967)	8/10/2004 8:28:31 PM
From: t2	Read Replies (1) \| Respond to of 77400

It was being compared to the recession levels and accomplished without big increases in employment...and the sales just grew quickly from depressed levels. Are you noticing a big increase in sales and activity OR just the pick up in employment opportunities. Hiring is obviously in anticipation of future growth and those plans could easily be shelved. There is a lag. Does not seem positive but who knows, maybe this is just very temporary and things pick up again...at least I hope it is.(am short CSCO for a trade)

To: Lizzie Tudor who wrote (65967)	8/10/2004 8:56:03 PM
From: t2	Respond to of 77400

Article with comments on inventory. Margins might be the other problem on the horizon. quote.bloomberg.com Inventory Concern ``The income statement is pretty good, not stellar, yet it's the inventories that I am most concerned about,'' Chris Baggini, who manages $800 million at Gartmore Global Investments, wrote in an e-mail after the results. Baggini, whose firm is based in Conshohocken, Pennsylvania, recently added to his firm's 1.3 million Cisco shares. Inventories rose to $1.21 billion from $873 million, Chief Financial Officer Dennis Powell said, because Cisco built up product to meet demand more quickly. Turnover of inventory fell to 6.4 times, down from 6.8 in the same time a year earlier. The figure reflects the number of times a company sells and replaces its inventory in the period. Inventories will remain high through the rest of the year, Powell said. Cisco is building up inventory of its Linksys consumer products ahead of the back-to-school season in the U.S., he said. Inventories are a ``secondary issue,'' Chambers said. First Quarter Cisco's gross margin, or the percentage of revenue left after subtracting the cost of goods sold, fell to 68.4 percent from 68.8 percent in the preceding three months. The company had forecast a gross margin of 67 percent to 69 percent. Cost of sales rose to $1.87 billion from $1.41 billion. The gross margin will be between 67 percent of sales and 68 percent this quarter, Powell said. Cisco's revenue will grow 16 percent to 18 percent, Powell said. That would generate sales of $5.92 billion to $6.04 billion, compared with the average forecast of $6.02 billion of 22 analysts surveyed by New York-based Thomson Financial. Excluding the cost of paying taxes for stock options that were exercised, and other expenses, Cisco had a profit of 21 cents in the fourth quarter. The company was expected to have a profit of 20 cents on sales of $5.89 billion, the average estimate of 35 analysts surveyed by Thomson Financial.