Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

Actually, it is even worse, if you look at the P&L statement for last year, their true COGS were $2.046 B (including $290 inventory "benefit" of inventory swing, after auditing, of course), on sales of $4.448 B. This quarter their COGS (not audited yet, you'll see some $400 MM in "inventory benefits", once they audit) are $1.407 B on sales of $4,845. Are you telling me that their gross margins have gone from 54% to 70% because of wringing waste out? Management should fired if they had so much waste to start with, but CSCO never ever had gross margins at 70%, why is not a single analyst asking "Are you expecting 69.3% gross margins going forward?". Are these analysts blind?

Zeev