Cisco Systems (CSCO) Stock Rises After Winning U.S. Patent Dispute

NEW YORK (TheStreet) -- Cisco Systems (CSCO) stock is gaining 0.44% to $27.43 in pre-market trading on Tuesday after the U.S. Court of Appeals for the Federal Circuit ruled on Monday that the company did not infringe a patent holding company's WiFi technology. 

The patent dispute was with Commil USA LLC, the holder of a patent for a method of implementing short-range wireless networks, Reuters reports. 

This action reverses a near $64 million judgment against it.

"The patent never had anything to do with our products and the millions of dollars spent defending this unmeritorious suit are a travesty," Cisco General Counsel Mark Chandler stated, according to Reuters.

Based in San Jose, CA, Cisco Systems designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate CISCO SYSTEMS INC as a Buy with a ratings score of A-. 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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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

  • CSCO's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 3.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CISCO SYSTEMS INC has improved earnings per share by 37.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CISCO SYSTEMS INC increased its bottom line by earning $1.73 versus $1.49 in the prior year. This year, the market expects an improvement in earnings ($2.28 versus $1.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 33.0% when compared to the same quarter one year prior, rising from $1,828.00 million to $2,431.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, CISCO SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CSCO

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