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

To: Holger Johannsen who wrote (12855)	3/10/1998 4:01:00 AM
From: tepli	Read Replies (1) \| Respond to of 77400

The "warning" that is being referred to is indeed CSCO's 10-Q. I understand that in 10-Q's and in Annual Reports and so on they must discuss every kind of risks that they can think of. Even seismic activity risks in Silicon Valley. Here are two quotes from CSCO's 1996 Annual Report: "The Company expects that in the future, its net sales may grow at a slower rate than was experienced in previous periods, and that on a quarter-to-quarter basis, the Company's growth in net sales may be significantly lower than its historical quarterly growth rate." and "The Company expects that gross margins will continue to decrease in the future, because it believes that the market for lower-margin remote access and high-speed switching products will continue to increase at a faster rate than the market for the Company's higher-margin router products." I think these "warnings" are quite applicable for a company that has $8 bn in sales and +65% gross margins. If the Street interprets this as a profit warning and an excuse to sell it reminds me last Decembers "inventory problem". Some analysts gave me good laugh back then. tepli

To: Holger Johannsen who wrote (12855)	3/10/1998 10:13:00 AM
From: LWolf	Read Replies (1) \| Respond to of 77400

Holger, I listened to the last CC. John did say that this quarter is traditionally a more difficult quarter for them, so he was setting expectations at the time. They had their forecasts and I'm sure they reviewed them with analysts as needed. The other point is that there was a lot of emphasis on their re-investing into the company for new technologies. I think that was made quite clear to the analysts and it was positively received. We'll just have to see what comes out today from the houses. Laura