LINK

http://www.cnnfn.com/1999/12/14/technology/cisco/

For educationaluse only

Cisco growth to slow? Networking giant says sales growth may decelerate in 2000 December 14, 1999: 8:18 p.m. ET

NEW YORK (CNNfn) - Computer networking equipment giant Cisco Systems, which has experienced explosive growth over the past several years with the rising use of the Internet, may be slowing down, according to documents filed with the federal Securities and Exchange Commission. In its quarterly report filed with the SEC on Tuesday, Cisco (CSCO) said that an anticipated slowdown in sales could make it difficult to provide quarterly earnings guidance to Wall Street. "We expect that in the future, our net sales may grow at a slower rate than experienced in previous periods, and that on a quarter-to-quarter basis, our growth in net sales may be significantly lower than our historical quarterly growth rate, the filing said. "As a consequence, operating results for a particular quarter are extremely difficult to predict. Last month, Cisco reported fiscal first-quarter earnings that were ahead of analysts' expectations, and its seventh consecutive quarter of accelerating revenue growth, posting sales that had increased 49 percent from the year-ago quarter. At that time, executives did not provide any specific sales projections. But they did say that they did not expect any major disruptions in their business because of "Y2K issues. Many computer makers had expected a slowdown in sales ahead of the millennium change, which could render some systems unable to distinguish the year 2000 from 1900, a condition widely referred to as Y2K. Accounting practices may cause restatement

Cisco also warned about the possibility that the company would have to restate its prior earnings reports, in the wake of recent scrutiny of the way companies account for acquisitions. Several companies -- most notably Tyco International (TYC), which has been on an acquisition binge in recent years - have been criticized recently for using a "pooling of interest method of accounting for their business combinations, which watchdogs say helps them pad their earnings. That has prompted the SEC to review the pooling of interests accounting method. "We believe we are in compliance with all of the rules and related guidance as they currently exist," Cisco said in the filing. "However, there can be no assurance that the Commission will not seek to reduce the amount of purchased in-process research and development previously expensed by us. This would result in the restatement of our previously filed financial statements and could have a material negative impact on financial results for the periods subsequent to acquisitions. The Fair Accounting Standards Board also is moving ahead with plans to eliminate the pooling of interests method of acquisition accounting. "If this occurs, it could alter our acquisition strategy and potentially impair our ability to acquire companies, Cisco said in the filing. Cisco shares slipped 3-1/4 to 97-15/16 in Nasdaq trade Tuesday, but picked up 1/2 in after-hours activity.

-- ghost (fading into the@background.com), December 14, 1999

Answers

But their Y2K "observation" room is ready.

;-D

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), December 14, 1999.

See thread...

Valley's New Year's Mix: Work And Play; High-Tech: Workers On Y2K Duty To Be Offered A Fun Atmosphere -- Minus Booze (San Jose Mercury News)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 001vra

-- Diane J. Squire (sacredspaces@yahoo.com), December 14, 1999.

That should cause a *huge* move tomorrow.

Bob

-- Bob (bob@bob.com), December 14, 1999.

The NASDAQ has been in a blowoff mode for a number of weeks now. The past few days it has closed without the standard final 30 minute buying frenzy. The next 2 or 3 weeks could be real interesting for the overall market. Watch the NASDAQ volume fo the next few days, it may tell the story.

Ray

-- Ray (ray@totacc.com), December 14, 1999.

Not to mention the effect of all the non-y2k compliant routers Cisco has had to replace. My place of work is still without e-mail and internet access, and we live and die by that these days, ever since a Cisco router went bye-bye last weekend. Turns out it had a previously unsuspected (by us) y2k bug that came out when we installed a new, compliant, voicemail system. (Yes, I know, two weeks to go and we're still trying to get everything fixed.) Cisco promised us a new one by today (Tuesday), but it turns out they didn't have one on hand BECAUSE OF ALL THE OTHER CUSTOMERS WHOSE SYSTEMS HAVE CRASHED. Our IT guys are still trying to get Cisco to say if they knew about the bug earlier but didn't tell us. If we hadn't just happened to need to put in a new voicemail system, the whole thing would have dissolved on Jan. 1. We're supposed to have a new router in hand tomorrow (Wednesday) morning. If this is FOF, by 1/15 we're all toast.

Final point -- everything in the system: router, voicemail, software, the works -- was put in brand new less than three years ago.

-- Cash (cash@andcarry.com), December 14, 1999.

Most of the foreign markets are going red Wednesday morning. Think we're going to see a downhill slide in the markets from here on out. No significant good news in sight for at least a few months.

-- Hawk (flyin@high.again), December 15, 1999.

S&P futures were way down this morning. Makes sense now.

-- Dave (aaa@aaa.com), December 15, 1999.