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

To: Ibexx who wrote (11676)	1/21/1998 6:14:00 PM
From: x70sxn	Read Replies (1) \| Respond to of 77400

Hello All: Here are some points that might help in ones invst. dec. Picked from their last 10Q. Long term csco is a obvious winner but short term this is negative. And if u donot like to hear negative info please ignore this info. ************************************************************************** The sales growth rate for lower-priced access and switching products targeted toward small and medium-sized businesses has increased faster than that of the Company's high-end core router products. These products typically carry lower average selling prices, and thus have slowed the Company's growth rate versus the first quarter of last year. Additionally, some of the Company's more established product lines, such as the Cisco 2500 product family, have experienced decelerating growth rates. Sales to international customers declined to 39.1% in the first quarter of 1998 versus 47.0% for the first quarter of 1997. The decrease reflects slower sales growth in certain international markets, particularly Japan, Korea, France, Germany and Italy. Sales growth in these markets has been impacted by certain factors including weaker economic conditions, delayed government spending, a stronger dollar versus the local currencies, and slower adoption of networking technologies. The Company expects that gross margins will decrease in the future, because it believes that the market for lower-margin remote access and switching products for small to medium sized businesses will continue to increase at a faster rate than the market for the Company's higher-margin router and high-performance switching products. The Company is attempting to mitigate this trend market for the Company's higher-margin router and high-performance switching products. The Company is attempting to mitigate this trend through various means, such as increasing the functionality of its products, value engineering, controlling royalty costs, and improving manufacturing efficiencies. There can be no assurance that any efforts made by the Company in these and other areas will successfully offset decreasing margins. The Company also expects that gross margins may be adversely affected by increases in material or labor costs, heightened price competition, and changes in channels of distribution or in the mix of products sold. For example, the Company believes that gross margins may continue to decline over time, because the sales of lower-margin access and switching products targeted toward small to medium-sized customers have continued to grow at a faster rate than the Company's higher-margin router and high-performance switching products targeted toward enterprise and service provider customers. The Company's gross margins may also be impacted by geographic mix, as well as the mix of configurations within each product group. The Company continues to expand into third-party or indirect distribution channels, which generally results in lower gross margins. In addition, increasing third-party and indirect distribution channels generally results in generally results in lower gross margins. In addition, increasing third-party and indirect distribution channels generally results in greater difficulty in forecasting the mix of the Company's products, and to a certain degree, the timing of its orders. **************************************************************************** Told ya! Added to these now the entry of LU,NT and INTC...oh boy! shrini [Did somebody say 'Short']