Why Cisco is the Tiger Woods of U.S. business

Tiger Woods
According to dual CCIE George Morton - President of Madison Solutions, a provider of strategic network solutions, "Cisco is the Tiger Woods of American Business. They hit the center of the green every time and this is in no small part to the management skills of John Chambers and his executive team. "Understanding this will help you understand what is going to be important to your IT shop in the coming years. Cisco's a winner in an industry that doesn’t know words like: steady, consistency, predictable."
Morton continued, "Whether you love, hate, or just don’t care, you have to admire Cisco and John Chambers' ability to build a winning game plan year after year. With all of the press wondering if Cisco will succeed with this new endeavor, or that new endeavor, I wouldn’t worry. The numbers tell the tale." Cisco employee count over the past 14 years:
  Total NonUSA MFG Engineers Sales Admin
2008 66,129 28,700 16,794 19,584 23,529 6,222
2007 61,535 26,500 16,227 18,410 21,465 5,433
2006 49,926 19,600 13,126 15,288 17,322 4,190
2005 38,413 11,000 6,812 13,935 14,414 3,252
2004 34,000 9,600 6,000 12,000 13,000 3,000
2003 34,000 9,000 6,000 12,000 13,000 3,000
2002 36,000 10,000 6,000 13,000 14,000 3,000
2001 38,000 11,000 7,000 13,000 15,000 3,000
2000 34,000 9,000 6,000 11,000 14,000 3,000
1999 21,000 4,400 3,900 7,000 8,600 1,500
1998 15,000 3,000 3,000 4,500 6,300 1,200
1997 11,000 2,000 2,200 3,400 4,500 900
1996 8,782 1,400 2,147 2,420 3,387 828
1995 4,086 621 - - - -
Source: Cisco Form 10-K Filings with the U.S. Securities and Exchange Commission.
George Morton
Morton added, "When you take the raw numbers, Cisco has consistently hit the ratio of employees to sales and income. Net Sales Revenue per employee has run around $571,000 for 14 years. When you consider who were the major players in 1995 in networking, companies such as Alcatel, AT&T/Lucent, Cabletron, DEC, HP, IBM and Nortel, the consistent ability of Cisco to stay focused on the end game is incredible."
Cisco net sales and net income per employee over the past 14 years:
  Total Employees Net Sales (Billion) Net Income (Billion) Net Sales per Employee (000) Net Income per Employee (000)
2008 66,129 39.5 8.1 597.32 122.49
2007 61,535 34.9 7.3 567.16 118.63
2006 49,926 28.5 5.6 570.84 112.17
2005 38,413 24.8 5.7 645.61 148.39
2004 34,000 22.0 4.4 647.06 129.41
2003 34,000 18.9 3.6 555.88 105.88
2002 36,000 18.9 3.6 525.00 100.00
2001 38,000 22.3 1.9 586.84 50.00
2000 34,000 18.9 2.7 555.88 79.41
1999 21,000 12.2 2.0 580.95 95.24
1998 15,000 8.5 1.4 566.67 93.33
1997 11,000 6.5 1.1 590.91 100.00
1996 8,782 4.1 0.9 466.86 102.48
1995 4,086 2.2 0.5 538.42 122.37

Average per Employee $571,100 Net Sales per Employee $105,700 Net Income per Employee
Source: Cisco Form 10-K Filings with the U.S. Securities and Exchange Commission. Morton noted, "I would look at Cisco as the bellwether IT company. Understand what are Cisco’s key new products and you are looking into the future of how your business will be aligning your IP network in the coming years. "The downside of all of this; no matter what, Cisco will hit the center of the fairway. With the economy slowing down for the first time in 14 years, I suspect that the key focus at Cisco will reflect the top priorities of IT shops. Right now that looks like security, teleconferencing, virtualization and data center."
Mark Sue
In his research note last week, RBC Capital Markets Managing Director - Mark Sue, echoed Morton's point: "Cisco's near-term quarter should be in line considering we're not expecting any erosion in margins or change to the company's healthy cash generation. Other bright spots include Cisco's router shipments to Tier 1 carriers, which to date remain firm, while cable equipment also seems relatively recession-resistant.

"During down cycles, we note Cisco has proven to gain market share. Considering its dominant market position and healthy financial model supported by a massive $8B share repurchase, Cisco still represents a strong defensive name, in our view. We believe CSCO deserves a premium multiple because of its growing markets and management's long track record of superior execution."


Do you agree with dual CCIE George Morton that Cisco is the Tiger Woods of American Business?

Brad Reese
http://www.BradReese.Com One year warranty on refurbished: Cisco Aironet Cisco Power Supplies Cisco VoIP Gateways One year warranty Cisco Repair One year warranty Refurbished Cisco
  
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