Predictable Greatness From Cisco: Fool by Numbers

On Aug. 7, networking mastodon Cisco Systems (Nasdaq: CSCO  ) released fourth-quarter 2007 earnings for the period ending July 28.

  • It's another predictably great quarter with strong sales and profit growth, stable income margins, and more cash generation than GAAP profits.
  • Few companies other than large banks can claim to have more cash than Microsoft (Nasdaq: MSFT  ) , but Cisco is one of them. Heck, the company is making a run at ExxonMobil (NYSE: XOM  ) and its $30 billion cash-on-hand balance. Net of debt, Microsoft is the only non-financial U.S. company that can match Cisco*. So what is the plan for all that moola?
  • You might expect inventory levels to rise about as quickly as revenues, but you'd be wrong this time. Most of the inventory components did behave as expected, except work in process which dipped from $377 million a year ago to only $45 million today. That's on purpose, and the effect of moving to a "lean manufacturing model" to speed up inventory turns.

*Says a Capital IQ screen for $16 billion or more in cash minus long-term debt, excluding the financial sector. Only two results, match.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2007

Q4 2006






Net Profit








Diluted Shares




Get back to basics with the income statement.

Margin Checkup

Q4 2007

Q4 2006


Gross Margin




Operating Margin




Net Margin




*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights


Q4 2007

Q4 2006


Cash + ST Invest.




Accounts Rec.









Q4 2007

Q4 2006


Accounts Payable




Long-Term Debt




The balance sheet reflects the company's health.

Cash Flow Highlights

Q4 2007

Q4 2006


Cash From Ops.




Capital Expenditures




Free Cash Flow




Owner Earnings




Free cash flow is a Fool's best friend.

Related Foolishness:

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned, but he wanted to. Fool rules are here, and they're keeping him from buying what he talks about all the time.

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