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 on Deck: Don't Expect Any Miracles

White expects Cisco to meet his earnings projection of 45 cents a share, while Paul Mansky of Cantor Fitzgerald expects the switch maker to match Wall Street's 46-cent forecast. Nomura's Sherlund believes that tight cost controls should help the company meet its outlook for a profit of 45 to 47 cents a share.

Cisco's guidance, however, will also be under the microscope, as investors weigh the likely duration of IT spending pressure. Analysts surveyed by Thomson Reuters are looking for fiscal second-quarter revenue of $12.02 billion and earnings of 47 cents a share.

" We do believe FQ2'13 guidance is likely to disappoint and expect 2013 to be a tough year as macro pressures persist (weak enterprise and gov't spending, Europe, etc.)," wrote JPMorgan analyst Rod Hall, in a recent note. "We also believe longer term SDN and competitive risks will keep a lid on Cisco's P/E multiple."

SDN refers to Software-Defined Networking, a set of techniques for managing network traffic flows through software, which is increasingly touted by the likes of Cisco and its networking rival HP (HPQ - Get Report).

Hall, who recently downgraded Cisco to neutral, adds that "battered telco equipment names" like Ciena (CIEN - Get Report) and smartphone and tablet-focused Qualcomm (QCOM) look "incrementally better" for 2013.

Topeka Capital Markets' White, however, has a buy rating on the tech giant. "Cisco is trading at just 5.8x (excash) our CY13 EPS estimate, sports a 3.3% dividend yield and trades below the 2009 trough downturn price-to-tangible book value, providing some downside support," he wrote, in a recent note.

Cisco shares, which are off 7.35% this year, were down 0.59% to $16.75 shortly after midday on Tuesday.

-- Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

2 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
CIEN $22.03 0.73%
CSCO $29.14 0.87%
INTC $32.51 0.03%
HPQ $33.00 -0.21%
IBM $171.66 0.55%

Markets

DOW 18,061.69 +23.72 0.13%
S&P 500 2,109.69 +0.77 0.04%
NASDAQ 5,059.9660 -0.28 -0.01%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs