NEW YORK ( TheStreet) -- Following its initial post of what looked like a solid second-quarter earnings beat Wednesday afternoon, Cisco (CSCO - Get Report) ended up with a repeat of last quarter: Its report of weak consumer and government spending as well as its uberconservative guidance dismayed Wall Street and sent its stock plummeting.
Cisco shares closed down more than 15% for the week at $18.70; not helping was a fresh round of analyst downgrades that hit Friday. Cisco also announced the departure of its consumer business head, Jonathan Kaplan. Kaplan was the former CEO of video cam maker Pure Digital, which Cisco bought in 2009 as a way to make inroads into the consumer space.
|Cisco announces its second-quarter results next week|
Cisco beat consensus revenue and EPS estimates of 35 cents on sales of $10.24 billion, citing 37 cents on revenue of $10.4 billion. But the company also posted a lower-than-expected gross margin (62.4% vs. the 63.3% analysts wanted to see) and low year-over-year guidance. Cisco blamed spotty government spending as well as the slowdown in cable set-top box sales, but reiterated its "winning strategy" Thursday morning in an interview with TheStreet.
The long-awaited Verizon (VZ - Get Report) iPhone launched for the general public Thursday, hitting Verizon and Apple (AAPL - Get Report) store shelves at 7 a.m. While not a lot of tech watchers doubt the success of an iPhone selling at the nation's No. 1 wireless shop -- sales numbers reportedly hit 500,000 the first day of presales -- lines outside stores Thursday morning were spare across the country. Samplings were small and casual, but reports from TheStreet and analyst firms noted some interesting patterns: Many of the Verizon iPhone buyers were already Verizon subscribers, many were switching from Research In Motion's (RIMM) BlackBerry devices and only a small percentage were switching from AT&T (T). Most of us expect Apple to release the faster, 4G-compatible iPhone 5 sometime this summer -- a phone that a small portion of TheStreet readers say they're waiting for.