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ABN E U DNP PCO u f TECH-ELECTRONICMANUFACTUBUS-US-DPR-US-ELC-US-BUS-ELI-US-HOT-JBL.N-SLR.N-FLEX.O-CLS.N-CLS.TO-CPX 11-080327 By Ian Karleff TORONTO, Nov 8 (Reuters) - Celestica Inc. (NYSE: CLS) andFlextronics (NASDAQ: FLEX) led the field of contract electronicmanufacturers into the red on Wednesday as investors decidedthat Cisco Systems' high inventory levels would impact theentire group's profits. Contract electronics manufacturers outpaced a four percentdecline in the Nasdaq Composite Index on Wednesday as jitteryinvestors sold off technology stocks ahead of a definitiveoutcome in the hotly contested U.S. Presidential election. The revelation on Monday that Cisco's inventory levelsjumped 59 percent sent investors running from the shares ofcontract electronic manufacturers, because Cisco is the largestcustomer to these types of companies. "Clearly the EMS (electronics manufacturing industry)generates a significant portion of its revenue from Cisco...theCisco inventory issue is making people nervous," said ChrisWhitmore, analyst at Deutsche Banc Alex Brown. Cisco's shares were off almost 7 percent on Wednesday,while shares of Flextronics dropped 11 percent, SolectronCorp.(NYSE: SLR) was off 4 percent, Jabil Circuit (NYSE: JBL) fell 7percent while Celestica dropped $5 1/8 to 59 3/4 for a 29percent drop since Oct. 23. Whitmore said Flextronics, Solectron and Celestica generateabout 10 percent of their sales from Cisco, while Jabil'srevenue exposure to the maker of Internet networking equipmentis closer to 20 percent. "I'd point out that the majority of Cisco's inventoryincrease is on the raw material side, not on the finishedproducts or work in progress side. And that is not a functionof a slowdown in the EMS industry," added Whitmore. Higher inventory levels is merely a function of Ciscosecuring hard to get components and raw materials to keep upwith demand, and their growth projections are still robust,added Whitmore.Rtr 14:54 11-08-00

longing for some market sanity!
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