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Cisco Plunges, Futures Drop Below Day's Lows After Hours
Cisco misses and stock drops 5%. In the meantime, futures are now plumbing the day's lows after hours. And the most troubling development from CSCO, worse than the top line miss, is the catch courtesy of Bloomberg's Adam Johnson that Days Sales Outstanding surge from 27 to 41 days. Customers incrasingly refuse to pay on time. We wonder how that will be spun favorably.
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Accounts Receivable Bitchez!
Obam-era Newspeak equivalent of "stuffing the channel"
Fire up the printing presses!
No problem with this the gov will past a bill to support the default payment. :)
Since when is extending payment part of the delevering process?
Deferred revenue can create AR, no?
The right-shoulder of a head-and-shoulder top for SPX is now forming. When it drops below 1060, its' all over.
Well clearly the non-paying companies are saving their pennies so they can all go on a hiring binge in the 4th quarter, just in time to lay them all off for Christmas. Oh Joy to the World.
LOL. That is soooooo priceless. I still have tears from laughter rolling down my cheeks.
Damn I thought I was easily impressed.
Election recovery.
http://www.youtube.com/watch?v=0f3JDGPIdCg&feature=related
How about: "Consumers are borrowing again!"? There, Normality Restored!
That's what they get for financing others' purchases. Was foretold.
Exactly. Great call mynhair.
Seen this movie a few times before, and know how it ends. (badly)
I remember John "caysh" Chambers bragging about this business foray on CNBS a few months ago.
Because going from a manufacturer to a financier has been such a good move for auto industry, after all. May as well give it a go, no?
Why do all of these people believe it is better to invest their capital in risky customers instead of their own businesses? Diversification of revenue is for investors, not entrepreneurs, who need to stick to their core competencies or die (if they lack any).
Maybe had he not ramped up production in light of non-existent demand, then they wouldn't have had to try to increase demand with free-money gimmicks? Now, they've not only thrown away money that will never return, they've pulled forward future demand, ensuring a downward spiral of sales revenues (lest a miracle occur).
Mal-investment indeed!
Why do all of these people believe it is better to invest their capital in risky customers instead of their own businesses?
Lending money to deadbeats is big business. Check out GE, GM, FNM, FRE...
Agree - I remember reading about Cisco's financing plan where - OH here!
Cisco financed customers worldwide through TransAmerica then pushed the bad AR off it's balance sheet. So the question "how did they keep on growing like that?".........................
What's worse, Cisco's 'growth' in the last decade came from printing stock certs and buying up other companies who were developing new products. Whoopsy.
Amen Brother Wookie. Whatever it takes to stay with "the analyst's consensus is....."
That's good news. Perhaps we'll have another pleasant day tomorrow.
customers are too busy selling stuff therefore forgot to pay the bill on time.
LOL - weren't they offering low cost self-financing for their junk?
Edit: http://www.cisco.com/web/ordering/ciscocapital/o45/ordering_finance_solu...
Positive spin: Finance department will see an increase in revenue due to late payment penalties going forward.
"Days Sales Outstanding surge from 27 to 41 days"
Yep, now THAT's a big deal! With all due respect to Karl, Denninger has written some solid pieces on CSCO over the past few quarters regarding their revenue recognition etc. I suggest you take a look (without shilling Karl's site) if you are interested.
Yeah - he did a good one on CSCO self-financing their sales, ala Lucent ...
Score one for Denninger.
"We wonder how that will be spun favorably."
Well, their biggest customers are currently using HFT networks. The money will be there soon.
Cisco reports profit jump
"We wonder how that will be spun favorably."
Well lets ask Steve Liesman in the morning and see what he says.
CSCO is still at the same old bullshit of BEAT BY A PENNY !
Nice going K. Denninger. You nailed this one good.
Riot police called in as thousands rush for federal aid
http://www.ksdk.com/news/local/story.aspx?storyid=211421&catid=28
Did you hear the comment comparing the event to Uganda? This really is amazing and scary.
The sad part is this exercise was just to get on a waiting list!
DSO surges? That's clearly a good sign because Cisco's customer's have more time to earn interest on the float, increasing THEIR profitability so they can buy even more CSCO products. It's win-win!!
No?
Juniper, bitchez
One of the biggest daily declines in NYA this year....
Crashed through the 50-day in one fell swoop.
<screaming> Get that sack of pus off my monitor now! <screaming off>
HA HA HA HA. This made my day!
<screaming after accidentally looking in mirror>
Good one
chambers is H O M O !
Robot ... How could you do this to us?
We wonder how that will be spun favorably...
MarketWatch: "CISCO REPORTS PROFIT JUMP - Networking giant posts a strong quarter, though shares fall in late trading on slight revenue miss."
Big headline at MarketWatch:
"Cisco reports profit jump"
That's their spin.
Yea no ones buying their bullshit anymore.
I am starting to save my pennies for that GM IPO. It's gonna rule.
ok chambers just said that U2 (unusual uncertainty) is the right description for what it's going on
We wonder how that will be spun favorably.—Tyler Durden
More evidence of Tyler’s importance:
The take-your-choice media assortment in the last few minutes:
Bloomberg… “Cisco Sales Miss Estimates on Sluggish Corporate Spending”
MarketWatch… “Cisco Reports Profit Jump; Network Giant Posts a Strong Quarter, Though Shares Fall in Late Trading on Slight Revenue Miss”
"Barf Out!"
"Gag Me With A Spoon!"
"It's Like, Tubular"
yes i really listened to Valley Girl the other day...awesome bass line
OK fine fer sure fer sure!
Sweet Jasus - didn't CSCO just report a record Q last quarter? Who turned out the lights?
They dragged forward demand to meet immediate sales goals. No Plan B for the following quarter because there could be no plan.
By the end of the year the sales guys will all have their bonuses and be off to the islands to enjoy their 70 virgins.
No future.
No future.
Queue up The Smartest Guys in the Room for another screening.
This can be an indication of 'channel cramming' wherein the vendor 'books' the revenue as a sale even though the customer isn't wanting delivery for several months forward.
Vendors will give big discounts near or at quarter end to get the buyer to sign off on a commitment to buy.
Well, either that or their credit standards have dropped.
From my last dealing with CSCO, I don't think that has happened.
wow PPT gots they work cut out fer em only 33k in ES volume in nite session down 8.75
eat it bulltards!! muhahaha
Suggested headline -
"CSCO customers delay making payments - Bush blamed"
CSCO: "Accounts Receivable, Lay-Away Department, may we help you?"
This is like the Matrix and only NEO can save us.....or wait...I think only LEO (kolivakis) can save us.
Get me my damn BLUE PILL Leo.
http://market-ticker.org/archives/2574-CISCO-Anyone-Remember-LUCENT.html
Seems as if CISCO tried to "finance" their vendors and then kept everything off books. That is how this POS company showed "Profit".
How many other companies in America did the same creative accounting showing they were profiting to increase the stock prices when in reality they are losing their asses???
My bet is ALL OF THEM.
This just proves that the companies are lying on their financial statements to investors. At one time this was illegal.
NOW it is stupid if you give money to a company (invest by buying shares) based on their own financial statements. This means that NONE of the stocks are priced in any reality and all the P/E ratios are bogus.
How is that to create a "sell signal"???
Just shows you that the market is completely wrong!
Yeah. Karl gets a Big Fat Told-Ya-So on that one. Good call, Karl!!!
When the BLS, the President, everyone in his administration, 80% of Congress, the FED, and the Banks all lie ... why would any sane person expect the CFO of every company in America to tell the truth, the whole truth and nothing but the truth. Welcome to the Post Modern World ... didn't you hear; truth is relative to the situation and when you boss says the profits are 10%, the truth becomes 10%, you then invent the rest of the numbers to match.
Principles?! We don't need no stinkin' principles!
Vendor financing FTW!
on ES http://i.imgur.com/0AzSu.png
hey omi
charts are looking pretty good compared to some of the links on this here, ZH site. guess you got to cover the w H O L E picture of mankind, or it wouldn't represent an accurate picture of our species. S U C C E S S
Wheres Leo with a China solar chart and some permabull talk of a surprise jump in employment data?
You don't get it a -45,000 miss is a "Surprise Jump".
You can check the inventories at Avnet, Arrow or CDW for those sorts of things.
this is channel stuffing (while cash disappears, ruh roh) you see the steady increase of inventories and accounts payable (voila):
http://www.google.com/finance?q=NYSE:ARW&fstype=ii