Earnings Reports for Aug. 8

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Cisco’s Profits Climb 69 Percent

Cisco Systems, the world’s biggestmaker of computer-networking equipment, reported fiscal fourth-quarter profits that topped expectations, pacedby strong sales to Internet service providers, cable and telephone companies.

The company said today that for the period ended July 29, its profit from operations rose 69 percent to $1.2 billion, or 16 cents a share,compared with $710 million, or 10 cents, a year ago. Sales rose 61 percent to $5.72 billion from $3.56 billion.

On that basis, the results topped the consensus forecast of 15 cents a share, according to First Call/Thomson Financial, which tracks company resultsand analyst estimates.

Including acquisition-related charges, gains on the sale of equity investments and payroll tax on stock option exercises, Cisco had net income of $796million, or 11 cents a share, compared with $605 million, or 8 cents, a year ago.

The stock has more than doubled in the past 12 months and has risen 24percent so far this year. BACK TO TOP

Verizon Falls Below Expectations

Verizon Communications posted higher, but disappointing, second-quarter profits today, and said it plans to merge its high-speed Internet accessbusiness with NorthPoint Communications Group.

Verizon, which is in contract talks to settle a strike by87,000 union workers, also said it expects its revenues to growabout 8-10 percent a year and its 2000 earnings to be$2.90-$2.94 a share. Analysts had expected the company to earn$3.15 a share this year, according to research firm FirstCall/Thomson Financial.

Verizon also said it expects to record pre-tax chargesthrough 2003 of about $2 billion for merger transition costs,including the costs of systems integration, branding, realestate consolidation and relocation.

Verizon, the telephone company formed by the merger of BellAtlantic Corp. and GTE Corp., said second-quarter profits,excluding one-time items, rose to $1.97 billion, or 72 cents ashare, compared with $1.87 billion, or 67 cents a share, a yearearlier.

The results fell short of Wall Street expectations of 83cents a cents a share, according to research firm FirstCall/Thomson Financial. The First Call estimate was based on theexpectations of three analysts.

Including one-time items, Verizon’s profits rose to $4.91billion, or $1.79 a share, compared with $1.94 billion, or 70cents a share, a year ago. Second-quarter revenues rose 15.7percent to $16.79 billion, with data revenues increasing almost32 percent to nearly $1.5 billion.

Verizon is expected to resume contract negotiations with itsunions this morning. Progress in the talks had slowed onMonday due to disputes over job security, forced overtime andunion access to jobs in the wireless telephone unit, one unionsaid.

About 87,000 telephone operators and line technicians wenton strike at 12:01 a.m. EDT Sunday, immediatelyafter their previous two-year contract expired. The walkout, by33 percent of Verizon’s workers, is the second strike in twoyears at the company.

Verizon’s total U.S. telecom group revenue rose 4.8 percentto $11.2 billion. Data sales of Verizon’s high-bandwidth andspecial access services, as well as network integrationservices, accounted for almost 70 percent of the group’s growth.

Total telecom expenses increased 3 percent over secondquarter 1999, with cash expenses up 1.9 percent.

The company, which has been trying to expand beyond its corelocal telephone business, said it added 71,000 DSL (DigitalSubscriber Line) subscribers, bringing its total to about220,000, a 47 percent increase from the end of first quarter2000.

Verizon, the first Baby Bell to win approval to offerlong-distance telephone service in its home market, added morethan 450,000 new long-distance customers. It had a total of878,5000 customers at the end of the second quarter.

“Last week we passed the one million mark for New York longdistance customers and the 250,000 mark for DSL lines, and we’reon track to reach our year-end target of 500,000 DSL lines,”Verizon President and co-CEO Ivan Seidenberg said.

Verizon Wireless, the company’s wireless telephonepartnership Britain’s Vodafone Group Plc, added about 800,000new customers, bringing its total customer base to 25.6 million.