Cisco beats expectations

Susan Rush
from CED Broadband Direct, August 7, 2002

Cisco Systems Inc.'s fourth-quarter were better than the Street was expecting, but the networking giant's good news was not enough to keep the Nasdaq on an upward swing.

In May when Cisco reported better-than-expected results, the NASDAQ jumped more than 96 points. But with accusations of financial wrongdoing and spending uncertainties, the market failed to be inspired this time. In midday trading, the NASDAQ was relatively flat, down less than a point at 1,258.80.

For the just-ended fourth quarter, Cisco reported net income of $772 million, or 10 cents a share. In the same quarter last year, the company posted net income of $7 million, or breakeven. Sales climbed from $4.3 billion to $4.83 billion.

To date, Cisco has shed more than 8,000 jobs and written off more than $2.2 billion in inventory. The company says it has been protected slightly from the telecom turmoil because only about 20 percent of its customers are from the telecom sector.

Although its customers remain cautious, Cisco expects to report a slight increase in sales in the first quarter 2003. As of 12:42 p.m. EDT, Cisco shares were up 79 cents, or nearly 7 percent, to $12.86.

Cisco also announced plans to beef up its share buyback program to $8 billion. Since September, when the program was first announced, Cisco has repurchased $2 billion of its shares.

Cisco's Chief Financial Officer Larry Carter plans to retire in May. Dennis Powell, vice president of corporate finance, will take over Carter's post.