Cisco Beats Again, On a Confusing Report (CSCO)

John Chambers & Co., A.K.A. Cisco Sytems (NASDAQ:CSCO), has just posted earnings.  The networking and data communications giant posted revenues of $9.6 Billion, and non-Gaap earnings of $2.5 Billion.  Non-GAAP EPS came in at $0.40, after a $0.03 tax benefit.  First Call had estimates at $0.36 EPS and $9.54 Billion in revenues.

Cash flows were $3.1 Billion, cash and equivalents were $24.7 Billion; it repurchased 96 million shares at a $31.28 average price; DSO’s were 33 days, down from 38 days the quarter before; non-GAAP inventort turns were 10.0 days, compared to 10.1 days the prior quarter.

John Chambers said, "We believe the migration to the second phase of the Internet and the proliferation of networked Web 2.0 technologies will help drive dramatic gains in productivity and innovation across all industries. If this market transition continues to unfold as we expect, it has the potential to power Cisco’s and the industry’s growth for many years to come."

Cisco Systems closed down 3.9% at $32.75 on more than 116 million shares at the unofficial close at 4:00 PM, but shares are down 3% more at $31.80 in after-hours trading. 

We predicted shares would fall under $32 or rise to above $35 based upon earnings, but until we hear the full John Chambers unprepared comments from the conference call we are considering this an unresolved issue.

Jon C. Ogg
November 7, 2007