Cisco Posts Modest Earnings

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Cisco Systems Inc. posted modest results for its fiscal first-quarter 2003,
but sales to broadband-service providers didn't exactly go great guns.

The Internet- and cable-equipment provider posted $4.8 billion in revenue, a
9 percent increase from the $4.4 billion posted in the same quarter last
year.

Pro forma net income -- excluding acquisitions, payroll tax and loss on
investments -- was $1 billion, or 14 cents per share, a significant jump
compared with $332 million in pro forma net income gathered in the first quarter
of 2002.

But sales in the service-provider sector 'continue to be challenging' because
of capital-expenditure cutbacks among network-provider customers, according to
Cisco.

One of the handful of customer wins was Charter Communications Inc.'s
purchase of Cisco 'uBR 10012 routers' as the MSO moves toward an
all-Internet-protocol, all-Cisco gear network.

And Cisco isn't looking for much improvement in the coming quarter, according
to CEO John Chambers.

'We remain concerned about the service-provider capex spending on a global
basis,' he said in a conference call Wednesday. 'There continues to be a good
chance that there will continue to be waves of capex reductions from the global
service providers. These waves started in the United States and are working
their way around the world.'

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