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Cisco Sees Modest Slide in 2012 Margins

NEW YORK, ( TheStreet) -- Cisco (CSCO - Get Report) says it expects gross margins to range between 60% and 62% for 2012.

The margin guidance came midway through a presentation by CFO Frank Calderoni during the company's annual analyst day.

Cisco's margins have been in focus as the networking giant struggles to cut costs as sales slow and pricing gets more competitive. Analysts had been expecting gross margins to narrow from the 63% level in fiscal 2011 with some on Wall Street targeting gross margins of 60.7% in 2012.

The pinch on margins comes with Cisco forecasting that revenue growth will slow to between 5% and 7% in fiscal 2012, which ends next July. Analysts are expecting earnings of 39 cents a share in the company's fiscal first quarter ending in October with gross margins projected at 61.3%, according to Thomson Reuters.

After treading water for most of the day, Cisco shares saw a modest bump on the news. The shares were recently changing hands at $16.32, up 1.4%.

Investors are tuned in to the Cisco show to hear the company's turnaround strategy. Perhaps even more interesting, the festivities are also a showcase of some of the executives on Cisco's bench that may one day replace John Chambers as CEO.

--Written by Scott Moritz in New York.



To contact this writer, click here: Scott Moritz, or email: scott.moritz@thestreet.com.

Follow Scott on Twitter at MoritzDispatch

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