Cisco Systems Inc. (NASDAQ: CSCO) reported earnings of $0.32 non-GAAP EPS and $9.09 billion in revenue.  First Call estimates were $0.30 EPS and $9 billion in revenue.  What is more important here than the past is the future.

We could not find anyone willing to say with too much authority that John Chambers would be positive, but he almost sounds positive.Chambers noted in the release, "We remain comfortable with our long-term vision andstrategy… and prioritize ourexisting opportunities…. intend to accelerate the alignment of ourresources to prioritize future growth opportunities, gradually decreaseour operating expenses……" That isn’t exactly bullish, but also isn’t calling for the sky to disappear.

As normal, guidance will not be known until the conference call.  First Call has estimates for the quarter ahead at $0.29 EPS and $8.75billion in revenues; and estimates for Fiscal July-2009 are $1.34 EPSand $37.15 billion in revenue.

During the quarter, Cisco repurchased 37 million shares for $600 million.  Even DSO’s, ordays sales outstanding, improved and were down to 29 days. Non-GAAPinventory turns were 11.3 times.

Cash flows from operations were $3.2 billion and it ended with about$29.5 billion in cash and equivalents.  Deferred revenue was $9.3billion, which is up year over year and sequentially.

Cisco also increased its stake to 1.7% in VMware (NYSE: VMW)

Cisco closed unofficially up 1.4% at $15.84, up a third straight day.Its 52-week trading range is $14.20 to $27.72.  Shares are up about 1%from the closing bell in after-hours reaction, but this should still beconsidered nothing more than unfinished business until the conferencecall where it gives guidance.

Jon C. Ogg
February 4, 2009

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