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

To: RetiredNow who wrote (71026)	9/7/2006 7:56:49 PM
From: Eric	Respond to of 77400

September 06, 2006 NEW YORK, Sept 6 - Cisco Systems Inc. said on Wednesday it saw growth opportunities in its enterprise and consumer video business, in the face of slowing equipment spending by phone carriers as they merge. At its annual analysts' conference, Cisco reiterated its upbeat forecast for the current fiscal year and Cisco Chief Development Officer Charles Giancarlo said the video business in particular was "ripe for reinvention." While it did not give details on any new products, analysts widely expect Cisco to launch a high-end video conferencing facility later this year that will compete with Hewlett-Packard Co.'s ((HPQ.N)) Halo Collaboration Studio. "We will be introducing some very significant product in enterprise in the next few months," said Giancarlo. "The market place that we are very excited about is video in the enterprise and in the commercial market space." Cisco has already been shifting into the consumer video business with its acquisitions of home router maker Linksys and cable set-top box maker Scientific Atlanta. As part of the strategy to diversify to focus on the growing number of people who download movies from the Internet or watch videos on their cell phones, Cisco also changed its logo by adopting a rounder font. Although Cisco is expanding into the video and entertainment market, it still makes most of its money from making routers and switches that direct Internet traffic. Cisco expects to keep gaining market share in routers, even though overall capital spending by phone carriers is likely to decline due to mergers, said Mike Volpi, general manager of Cisco's routing and service provider technology group. "Clearly, there will be less capex overall. We fundamentally believe that we are at a peak in overall capex," said Volpi. Cisco reiterated its forecast for 15 percent to 20 percent revenue growth in fiscal 2007, and year-on-year revenue growth of 19 percent to 21 percent in the first quarter. "We turned the corner in the routing space. We'll be picking up market share continuously in the routing space," said Giancarlo. Analysts said Cisco's presentations on Wednesday were upbeat, but Chief Executive John Chambers did not surprise the market on the upside as he did following the company's quarterly earnings announcement on August 8. "Overall, we believe Cisco's long-term strategy and strong execution will enable it to continue to lead the sector and post the highest growth-rates among large-cap tech plays," said Lehman Brothers analyst Jiong Shao, maintaining a "1-overweight" rating on the stock. Chief Financial Officer Dennis Powell said Cisco would continue to be active in buying back its shares and reiterated plans to make a dividend payment at some point. Powell also said he saw Cisco's tax provision rate unchanged at around 26 percent "for the foreseeable future." In fiscal 2006, Cisco used $8.3 billion to repurchase 435 million shares. It said in August the remaining approved amount for share buybacks is about $4.6 billion. Powell's comments gave a brief upward push to Cisco's shares, but they ended down 40 cents, or 1.8 percent, at $21.69 on Nasdaq.