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Cisco's (CSCO) Poor Guidance Hurt More Than Just Cisco

NEW YORK (TheStreet) -- What do Finisar (FNSR), Jabil Circuit (JBL), Ciena (CIEN) and Riverbed Technology (RVBD) have in common? They were all battered during Thursday trading and they each have Cisco (CSCO) to blame.

Cisco shares plunged 10.8% to $21.40 after second-quarter guidance disappointed Wall Street. For the quarter ending January, the San Jose-based business forecast net income between 45 cents and 47 cents a share on revenue in the range of $10.89 billion to $11.13 billion. Analysts surveyed by Thomson Reuters had consensus of 52 cents a share on $12.6 billion.

The prediction quarterly revenue would fall between 8% and 10% didn't bode well with Cisco's suppliers, Finisar and Jabil Circuit, the former which supplies Cisco with optical components and the latter semiconductors. Finisar shares dropped 7.4% to $21.68, while Jabil fell 3.9% to $19.87.

Competitors Ciena and Riberbed weren't spared the sell-off after Cisco credited weak sales to diminishing demand in formerly lucrative emerging markets, such as Latin America and Africa. Ciena plummeted 7.1% to $21.86 and Riverbed shed 5.8% to $17.94.

TheStreet Ratings team rates Cisco Systems Inc as a Buy with a ratings score of B+. The team has this to say about their recommendation:

"We rate Cisco Systems Inc (CSCO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

TheStreet Ratings team rates Finisar Corp as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate Finisar Corp (FNSR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

TheStreet Ratings team rates Jabil Circuit Inc as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate Jabil Circuit Inc (JBL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, attractive valuation levels, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

TheStreet Ratings team rates Ciena Corp as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate Ciena Corp (CIEN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

TheStreet Ratings team rates Riverbed Technology as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate Riverbed Technology INC (RVBD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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