Chambers’ Conference Call Commentary… Cisco Guidance Soft (CSCO)

Cisco Systems, Inc. (NASDAQ: CSCO) did give guidance in the conference call, and the shares got whacked over a less confident in near-term visibility and a weak January that is expected to last for several months. 

Below are some of the guts of Chambers’ paraphrased comments:
"Despite macroeconomic changes, we remain comfortable with long-term growth projections…. Long term 12-17% yr/yr, but at risk of stating the obvious there may be times that the growth will be above and below…… US is experiencing challenges… we are seeing US and EU customers remaining cautious….. product order growth was in low-teens…. orders were strong in December but January growth was lower than expected and was challenging… because of environment forecasting next quarter is EXTREMELY challenging…. due to caution from peers and customers and the company assumes that January’s growth rates may continue over next several months…. Shares now DOWN 5% at $21.89…. We believe strategy is right on target…. our best estimate is that this is a relatively short term challenge….  Q3 2008 REVENUE GUIDANCE is 10% year over year growth, (or otherwise 10% higher than $8.866 Billion to generate a guidance of $9.75 Billion)….. Unfortunately that is well under the $10.2 Billion FIRST CALL estimate……." -end of Chambers-

ON LAST LOOK CISCO SYSTEMS STOCK WAS DOWN SOME 7.6% to $21.31 at 4:56 PM EST.  That will mnark a new 52-week low if the stock is static in the morning.  The 52-week trading range is $22.30 to $34.24.

a673b.bigscoots-temp.com EARNINGS RELEASE:
Cisco Systems, Inc. (NASDAQ: CSCO) $0.38 non-GAAP EPS on revenues of $9.83 Billion.  First Call had estimates of $0.38 EPS and $9.79 billion in revenues. Net earnings after charges were $0.33.    Chambers noted: "As we enter the second half of the fiscal year, our innovation pipeline is in excellent shape, our balanced product momentum across core and advanced technologies continues to be solid, and execution against our long-term strategy remains unwavering. This constant evolution of moving into new markets and product adjacencies, alongside our core operational and financial strength, is the hallmark of Cisco’s ability to act upon key market transitions."

Jon C. Ogg
February 6, 2008