This is a partial transcript from "Your World with Neil Cavuto," August 11, 2004, that was edited for clarity.

BRENDA BUTTNER, GUEST HOST: Cisco (search) reporting earnings that were better than expected. But CEO John Chambers strikes a note of caution. He says CEOs he’s talking to are, "a little more cautious than they were just three months earlier." Cisco shares dropping 11 percent, investors are out $14 billion just today.

Well, earlier today I asked John Chambers if he thinks its fair that Wall Street did not welcome Cisco’s earnings and company outlook.


JOHN CHAMBERS, CISCO SYSTEMS PRES. & CEO: I think it is fair that we provided a little bit more caution than we did a quarter ago in terms of the outlook, not in terms of anything that we saw in our own business but just what are seeing in the microeconomics issues on a global basis. And remember, GDP (search) growth is usually the best indicator of how we do in our marketplaces over time.

So, what we basically said as we were just seeing a little bit less optimism from the CEOs than we saw a quarter ago, they’re still optimistic about he future of the economy in the U.S., but just a little bit less optimistic.

I think on the inventory issue, that’s something I’m very comfortable with. As we said in our conference call, we think the inventory is very much where we want to get lead times down and is not an issue for us.

BUTTNER: Do you have a concern about the economic recovery upon hearing from some of these CEOs some of that caution?

CHAMBERS: Well, I think, Brenda, the major take-away is Cisco is coming off a very strong quarter. And we’re a pretty good indicator of capital spending. So the quarter was very linear throughout. The second thing is that the CEOs were just a little bit more optimistic a quarter ago than they are at the present. Still optimistic but they’d use the moderate growth. We always try to be very transparent in what we’re seeing in the marketplace. And we make our decisions for the long run. So I think the economy is in good shape and I think the question is just how good.

BUTTNER: Will you continue to hire? You’re one of the few corporations out there who does have hiring plans. Do you see any change in that?

CHAMBERS: No, we do not. And we reiterated on the conference call, we’re going 1000 people, primarily in the U.S., by the end of this year. That in and of itself was a very optimistic comment about the long-term prospects we see for our industry and for Cisco in particular.

BUTTNER: Well, sir, I hope you won’t mind, but indulge me for a moment, many investors out there are hold their cash because there is a lot of uncertainty on Wall Street about the presidential election. Do you feel one way or the other? Do you think one candidate or the other would be best for your business?

CHAMBERS: Well, from the technology perspective I think you will find technology really is agnostic on political parties. It’s about productivity, it’s about standard of living. So I think both political parties court technology very well.

As you know, I’m a strong supporter of President Bush.

BUTTNER: So would you be concerned that if John Kerry would be elected some of the tax benefits on dividends, on capital gains might hurt business?

CHAMBERS: Well, Brenda, I’m not an expert in those areas. What I do try to do is focus on what areas are most. And I think the issues about economic growth, monetary stimulus are the most important for technology.


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