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

To: Lynn who wrote (19824)	12/14/1998 2:42:00 PM
From: Eric	Read Replies (1) \| Respond to of 77400

Lynn, I like to watch the action in the last half hour of trading. So far this sell-off is wimpy.....we shall see. Eric

To: Lynn who wrote (19824)	12/15/1998 1:20:00 AM
From: jach	Read Replies (2) \| Respond to of 77400

MUST READ FROM PART of FORM 10Q "Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, statements containing the words "believes", "anticipates", "estimates", "expects", and words of similar import, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are referred to the "Financial Risk Management" and "Potential Volatility in Operating Results" sections of the Company's 1998 Annual Report to Shareholders, to the "Acquisitions, Investments and Alliances", "Backlog", "Competition", "Research and Development", "Manufacturing", "Patents, Intellectual Property and Licensing", "Future Growth Subject to Risks" and "Other Risk Factors" sections, among others, contained in the Company's 1998 Form 10-K filed on September 25, 1998, and to the "Financial Risk Management" and "Future Growth Subject to Risks" and "Potential Volatility in Operating Results" sections contained herein which identify important risk factors that could cause actual results to differ from those contained in the forward looking statements. Net sales grew to $2.59 billion in the first quarter of 1999 from $1.87 billion in the first quarter of 1998. The 38.5% increase in net sales between the two periods was primarily a result of increasing unit sales of LAN switching products such as the Catalyst(R) 5000 family, access servers such as the Cisco 3600 family, growth in the sales of add-on boards that provide increased functionality, and increased maintenance service contract sales. 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. However, these products typically carry lower average selling prices. Additionally, some of the Company's more established product lines, such as the Cisco 2500 and 4000 product families, have decreased as a percentage of total revenue. Sales to international customers increased to 41.1% in the first quarter of 1999 versus 39.1% for the first quarter of 1998. The increase reflects sales growth in certain international markets, particularly Germany, the United Kingdom and Canada. Sales growth in other markets, such as Japan, has been negatively impacted by certain factors including weaker economic conditions, delayed government spending, a stronger dollar versus the local currencies, and slower adoption of networking technologies. Gross margins increased slightly to 65.5% in the first quarter of 1999 from 65.1% in the first quarter of 1998. This increase is due principally to the Company's improvements in value engineering efforts and material cost reductions, and was partially offset by the continued shift in revenue mix to the Company's lower-margin products. The prices of component parts have fluctuated in the recent past, and the Company expects that this trend may continue. An increase in the price of component parts may have a material adverse impact on gross margins. ==== warning sign here ==================> ****** The Company continues to expect 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. Additionally, as the Company focuses on new market opportunities, it faces increasing competitive pressure from large telecommunications equipment suppliers and well funded start-up companies, which may adversely effect gross margins. === CUT ===================== **** SAID IT EXPECTS GROSS MARGIN TO GO DOWN** SAID TOUGH COMPETITIONS FROM LARGE TELECOM and STARTUPS *** have been saying it all along, CSCO will have tough times ahead. Target 50$ next year. All imo.