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Technology Stocks : Cisco Systems, Inc. - Off-topic postings -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (17)	11/12/2007 11:54:50 AM
From: Sonki	Respond to of 230

Cisco Offers Stable Growth -glad i bot on friday thoguh i thought i was early. There are lots of puts at 32.5 so the stock has a good chance to go up over the week. 3% today is a lot today all in one day but this stock will have a bid under it on any dips. from briefing.com Given the fact Technology has been the bread and butter of this market, while Financials suffer from the black plague, market participants were hoping for another knock-out quarter from one of the tech bellwethers as we've seen from the likes of Apple (AAPL), Intel (INTC), Microsoft (MSFT), Oracle (ORCL) and Research In Motion (RIMM). Instead, Cisco (CSCO), made an about-face this quarter and delivered a noticeably tempered outlook. A penny beat, coupled with the absence of raised guidance sent the stock plunging in the after-market. But for those who have to own tech, considering it's the one sector that continues to work, the pullback is a gift. Cisco's growth is arguably much more stable given its geographical footprint and end-market diversity, compared to the heavily-geared consumer and/or enterprise segments. We find fault in the estimation that Cisco's guidance is an effort to reduce expectations. Given the challenging macro conditions, which showed up in a weak U.S. enterprise segment in the quarter, Cisco is more likely taking a conservative approach, meaning it's comfortable with current Q2 estimates. For the second quarter, Cisco forecasts revenue growth of 16% equating to $9.79 billion vs. the consensus of $9.81 billion, in addition to slightly higher gross and operating margins. FY08 growth rate remains between 13% and 16%. We don't expect to see downward revisions coming from the Street this morning. Instead most analysts will likely come out in support of the stock after its free-fall. Cisco is still seen as a defensive name in an increasingly manic market. Overall, there was little to contest as Cisco's interim performance was solid across the board, with the exception of the U.S. enterprise segment, which was expected. The bottom line, in spite of the weakness, is that Cisco generated nearly 17% revenue growth, a 40 basis point sequential increase in gross margins, a seasonally strong book-to-bill of 1.0 and order book, record operating cash flows of $3.1 billion, and a penny upside in earnings. Router revenues were strong, up 18%, with the high-end segment gaining 28%, Advanced Technology was up 27%, services were up 24%, while switching, negatively impacted from U.S. enterprise, gained only 8%. No doubt, there was a pronounced change in Cisco's tone over the past quarter. The company noted weakness in financial, auto, and retail. But Cisco's geographic breadth will continue to support growth. This quarter orders rose 20% in Europe, high teens in Asia, and 35% in the Emerging Markets. Orders rose 13% in the U.S., where Cisco continues to benefit from strong order growth from service provider and government segments, atoning for enterprise weakness. Cisco's exposure to long-term growth trends impacting carrier, consumer and enterprise segments in both the emerging and developed markets continue to make the stock a name to own. Additionally, Cisco's geographic breadth, coupled with increasing contributions from the Advanced Technology segment underscore a favorable outlook. We think the sell-off represents an attractive opportunity to build a position in the stock, a suggested portfolio holding since February of 2006.