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Cisco`s Q1 at a Glance Networking equipment giant Cisco Systems turned in fiscal first-quarter results tonight after the market`s close. Matt Richey ran through the numbers and says they amount to a bitter-sweet recipe: strong topline growth mixed with a balance sheet that might point to deteriorating cash earnings power. By Matt Richey (TMF Verve) November 6, 2000 Networking equipment giant and FOOL 50 component Cisco Systems (Nasdaq: CSCO) reported fiscal first-quarter (ended October 28) financial results after the market`s close today, turning in pro forma net income -- which excludes acquisition charges, payroll tax on stock option exercises, and net gains realized on minority investments -- of $1.36 billion and $0.18 per share. The per share figure, unsurprisingly, beat First Call`s consensus estimate by the "magic penny." Last`s year`s EPS was $0.12. Cisco stock retreated a bit in after-hours trading. "We are very pleased with the solid balance across our major geographies, lines of business, and product families," said CEO John Chambers. "And, while we`re proud of our accomplishments over the last decade, we are even more optimistic about the opportunities for Cisco in the next decade." Actual net income for the quarter was $798 million or $0.11 per share, compared with $415 million or $0.06 per share for the same period last year. Cisco completed several acquisitions during the three-month period -- HyNEX, IPmobile, Komodo Technology, Netiverse, and NuSpeed all joined the Rule Maker Portfolio holding`s quiver -- leading to assumed liabilities of approximately $1.37 billion, and a one-time charge of $509 million (approximately $0.07 per share after-tax) as a write-off of in-process research and development. Cisco`s sales rose 66% year over year to $6.52 billion. !!!!!!!!!!!!!!!! I`d rate this a bitter-sweet earnings report. First the sweet. Cisco`s top-line sales growth rang in at 66.4% compared to the year-ago result. That marks the 11th consecutive quarter of year-over-year sales growth acceleration. Such growth for a company with over $20 billion in trailing annual sales is beyond phenomenal. But now the bitter. The balance sheet reveals that Cisco is having to invest substantially in receivables and inventory in order to fuel this growth. Since Q1 of last year, Cisco has increased its combined investment in receivables and inventory by $2.8 billion -- an increase of 137%. It`s never good to see receivables and inventory growing faster than sales. And when those accounts are growing twice as fast as sales growth, that spells potential trouble. Without having listened to the conference call, I`d suspect this reflects Cisco`s move into the telecom space, where carriers demand more liberal payment terms and more demo equipment. !!!!!!!!!!!!!!!!!!!! In brief, Cisco`s heavy investment in receivables and inventory will drag down free cash flow. If this trend continues, it would indicate a deterioration in Cisco`s cash earnings power. I`d recommend listening to the conference call in order to get management`s take on the issue. Investors can visit Cisco`s investor relations webpage to access both the company`s quarterly earnings conference call and a recent webcast hosted by Lehman Brothers, as well as a ton of other information about the company. According to the company`s earnings press release, it will discuss its outlook for the rest of the fiscal year during the conference call. Cisco hat seinen Zenit überschritten...zumindest vorläufig mfg gewgaw |
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| aus der Diskussion: | CISCO ...unerreicht! |
| Autor (Datum des Eintrages): | gewgaw (07.11.00 15:24:13) |
| Beitrag: | 32 von 40 (ID:2283601) |
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