The Buzz


Reading Ciscos tea leaves

Cisco Systems fiscal year closes July 31, and analysts are reading between the lines to see how CEO John Chambers et al. will do. The consensus: Cisco is on track to hit earnings estimates of 28 cents per share in the fourth fiscal quarter on sales of $7.9 billion, but it may be close.

Among the tea leaves being read:

• Ciscos travel budget. Pacific Crest Securities analyst Tim Daubenspeck reports in a June 30 note that Cisco hasnt cut its travel budget—a good indicator that the company isnt stretching to make its numbers. "Our contacts have indicated that Cisco has not instituted a hiring freeze or travel limitations," said Daubenspeck in Portland, Ore.

• The feds are spending. "Despite the fact that budgets among Ciscos customers remain tight, we believe that the company has nearly met its federal revenue quota for the fourth quarter with almost five weeks left," Daubenspeck said.

• Enterprises are wary. Citigroup analyst B. Alexander Henderson said in a June 27 report that field checks with resellers indicate that corporate buying was soft in early June. "We are more concerned about the uncertain interest rate and energy price environment and the potential for sustained enterprise order push-outs," said Henderson in New York.


eBay reshuffle ruffles feathers

Want a quick way to worry wall Street? Try reshuffling management in one swoop with Google breathing down your neck. On July 6, eBay announced the departure of Jeff Jordan, president of the companys PayPal unit, in a surprise shake-up. Jordan, 47, was at one time viewed as a potential successor to eBay CEO Meg Whitman but now will spend more time with his family. The timing was curious: Jordan split just as Google announced Google Checkout, a potential PayPal killer.

Jordan joined eBay in 1999 and led eBay North America until 2004. He will leave in the fall after a two-year stint at PayPal. Succeeding Jordan will be Rajiv Dutta, eBays chief financial officer before becoming Skypes president earlier this year. Among other changes, Alex Kazim will become president of Skype, reporting to its CEO and founder, Niklas Zennstrom. Kazim is now Skypes vice president of products.

And the reaction from analysts?

Anthony Noto, of Goldman Sachs, in New York, said: "Jeffs decision to spend time with his family could reflect the fact that Meg Whitman has recently stated she intends to stay. With Megs indication that she could stay three-plus years, any chance of Jeff becoming CEO is pushed off."

"The announced management changes come at an inopportune time, particularly with well-publicized competitive challenges from Google (Checkout), Gmarket (Korea) and slowing core domestic listings growth," said Merrill Lynchs Justin Post, in San Francisco.


Plane ticket severance

From "The crazy things that people continue to ask for—and receive—as part of their severance agreements never ceases to amaze us here at Footnoted. Just this past month, weve found severance furniture and a severance watch, not to mention computer power cords. Now, its 24/7 Medias turn to show just how creative they can get. Their entry? Two round-trip plane tickets between the United States and Switzerland for outgoing executive Christopher J. Wagner, according to an 8-K filed. While theres no mention in the agreement whether the tickets are coach or first class, our bet is on the latter. Then again, we wouldnt have expected someone to ask for power cords, either."

—Compiled by Larry Dignan