What to Expect From Cisco Systems (CSCO) When They Report Earnings

NEW YORK (TheStreet) -- Cisco Systems Inc.  (CSCO) is set to report its fiscal first quarter earnings on Wednesday, Nov. 12 after the market closes.

Analysts are expecting earnings for the quarter of 53 cents per share, flat from the same quarter of last year. Analysts are calling for fiscal first quarter revenue of $12.16 billion, higher than the $12.08 billion the company reported a year ago. 

Shares of Cisco closed at $25.15 on Tuesday.

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San Jose, CA-based Cisco designs, manufactures, and sells Internet protocol-based networking and other products related to the communications and information technology industry.

The company also has a line of products for transporting data, voice, and video around the world, operating in the Americas, Europe, Middle East, Africa, Asia Pacific, Japan, and China.

Separately, TheStreet Ratings team rates CISCO SYSTEMS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.10 is very high and demonstrates very strong liquidity.
  • The gross profit margin for CISCO SYSTEMS INC is rather high; currently it is at 64.40%. Regardless of CSCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.20% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.5%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: CSCO Ratings Report

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