This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cisco Hasn't Lost Luster

NEW YORK ( TheStreet) -- Cisco's (CSCO - Get Report) turnaround continues to be a work in progress, but the networker still has plenty to offer investors heading into its fourth-quarter results, say analysts.

"We continue to believe Cisco is an underappreciated turnaround story similar to what we have seen with Apple (AAPL - Get Report), IBM (IBM - Get Report), and EMC (EMC - Get Report) in the past, explained Sterne Agee analyst Shaw Wu, in a note released on Tuesday. Wu, who has a buy rating on Cisco, anticipates a decent quarter and guidance, albeit amid lowered expectations.

Analysts surveyed by Thomson Reuters expect Cisco to report revenue of $11.6 billion and earnings of 45 cents a share after market close, compared to $11.2 billion and 40 cents a share in the same period last year.

For its first quarter of fiscal 2013 ending in October, Wall Street currently expects Cisco to report revenue of $11.66 billion and earnings of 46 cents a share.

Nonetheless, Cisco's results come hot on the heels of yet another workforce reduction as the company announced plans to cut its workforce by 2% last month. The Dow component also underwent a massive corporate overhaul last year, which involved layoffs and widespread restructuring.

Seen as a key barometer for IT infrastructure spending, Cisco struck a cautious tone when it delivered its third-quarter results in early May.

Although the San Jose, Calif.-based firm eased past Wall Street's estimates, its shares tanked on weak fourth-quarter guidance. Specifically, Cisco CEO John Chambers cited Europe, the public sector and India as areas of concern. Southern Europe's economic problems, he noted at the time, were spreading to northern Europe.

Nomura Equity Research analyst Stuart Jeffrey, however, sees signs of positive momentum crop up over the last three months.

"While the demand environment has been challenging, we believe it's already baked into Q4 expectations," he explained, in a note released on Tuesday, adding that Cisco's gross margin should continue to come in above its 61% to 62% guided range.

Recent comments from John Chambers could also bode well for the company's numbers, according to Jeffrey, who has a buy rating on the stock. "Management's latest views on the macro have improved, noting that the U.S. has firmed while Europe has not deteriorated further," he explained.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
CSCO $28.82 0.00%
EMC $26.50 0.00%
IBM $169.78 0.00%
FB $81.53 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs