Cisco Systems Inc. stock fell more than 8 per cent last week amid rumours that CEO John Chambers and/or CFO Larry Carter would resign without attesting to the accuracy of the company’s fourth quarter and fiscal year 2002 financial results.
Cisco will report its fourth quarter and fiscal year 2002 results, which ended July 28, on Aug. 6.
Cisco does not typically comment on rumours, but this one was apparently too hot to resist. Cisco told Reuters that it has a “strong financial process to ensure that our disclosures are appropriate, complete and accurate.”
“Cisco’s CEO and CFO stand behind our filings and have always approached our disclosures with the degree of seriousness and responsibility they warrant. Formalizing this process does not give us any concern. We fully intend to comply with this regulation, and will sign accordingly,” Cisco says.
Government security regulators recently mandated large companies must swear to the accuracy of their financial statements.
“Because our fiscal year ended July 27, our deadline to file is Oct. 25. We plan to file our certification with our 10K in late September, consistent with our practice of filing well in advance of deadlines,” Cisco says.
Some analysts were quick to dismiss the rumours.
“I don’t see any merit in the Cisco CFO/CEO certification [or resignation] rumours, which unfortunately may be a result of short sellers creating the negative buzz in order to buy Cisco on a dip before its earnings on Tuesday,” says Bill Lesieur, director of Technology Business Research.
“If CFO Larry Carter wanted to leave Cisco for career or personal growth reasons, I don’t see him leaving before 2003. Carter is one of the most accomplished high-tech CFOs ever, so I imagine he would want to leave Cisco on a high note, when the market is on a stronger recovery path in 2003,” he adds.
“Larry Carter, who is turning 60, has always said he would like to retire at some point in the future. His departure, whenever it may be, will be a smooth and well-planned transition,” Cisco says.
“As for CEO John Chambers leaving Cisco, I don’t envision that happening in the near future, unless President Bush offers him a new cabinet position as high-tech czar of the United States of America,” Lesieur says.