Cisco Systems Inc. (NASDAQ: CSCO): Q4 Earnings Preview 2011

Cisco Systems Inc. (NASDAQ: CSCO), the world's largest computer networking gear maker, is scheduled to release its fiscal fourth-quarter earnings after the market close on Wednesday, August 10, 2011. Analysts, on average, expect the company to report earnings of 38 cents a share on revenue of $10.98 billion. In the year ago quarter, the company reported earnings of 43 cents per share on revenue of $10.84 billion.

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP)-based networking and other products to the communications and IT industry worldwide. The company is often considered as a technology-industry bellwether as it dominates the market for routers and switches.

In the preceding fiscal third-quarter, the San Jose, California based company's net income was $1.8 billion, or 33 cents a share, compared to a profit of $2.2 billion, or 37 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 42 cents a share in the latest quarter. Adjusted income was 42 cents a share. Revenue rose to $10.9 billion from $10.4 billion. Analysts, on average, expected the company to report earnings of 37 cents a share on revenue of $10.86 billion.

At its last earnings call in May, the company said that it expects revenue to be flat to up 2% from the year-earlier period, which translates to a range of roughly $10.8 billion to $11 billion. The company said it also expects adjusted earnings in the range of 37 cents a share to 39 cents a share.

Last month, the company slashed nearly 6,500 jobs globally in an attempt to cut mounting costs. Separately, the networking-equipment giant has agreed to sell its Juarez, Mexico-based video equipment unit to Foxconn Technology Group, the terms of which were not disclosed. Cisco expects to recognize total pre-tax restructuring charges to its GAAP financial results of not more than $1.3 billion over several quarters, consisting of severance and other one-time termination benefits. The company estimates that about $750 million of these charges will be recognized during the fourth quarter of fiscal year 2011, including nearly $500 million relating to the voluntary early retirement program. The remaining is expected to be recognized during fiscal year 2012. The company also expects to incur other charges related to its reorganization program.

Cisco's global operations and a clientele spanning businesses and government agencies has made it one of the technology sector's bellwethers. The management team's record of controlling costs and growing the business through acquisitions also made them a darling of tech investors over the years. Cisco has also diversified in recent years.

Cisco has been struggling to cope with rising costs that has threatened to derail its growth. Moreover, a fragile global economy has proven more damaging than initially expected. Moreover, competition in the company’s core markets has been intensifying for some time. On the bright side, Cisco has been diverting resources to rapidly enter a wide range of adjacent businesses in relatively short order. According to industry experts, Cisco still faces competitive hurdles, as other big tech giants, including one-time partner Hewlett-Packard (NYSE: HPQ), scramble for a larger piece of the corporate IT market, especially with the shift toward cloud computing, which is boosting the demand for data center systems. Cloud computing allows companies to tap computing power through a network instead of in-house data centers.

Full Disclosure: None.

Cisco: Layoff Speculation Mounts

The rumors of job cuts at networking giant Cisco Systems, Inc. (CSCO) is gaining momentum. The company could cut as many as 10,000 jobs, which amounts to about 14 per cent of its workforce in order to reduce costs and revive profit growth. Cisco announced this spring that it was aiming to save $1 billion in the fiscal year 2012. According to the Bloomberg report, "The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren't final. Cisco is also providing early-retirement packages to about 3,000 workers who accepted buyouts, the people said."

Full Disclosure: None.

Cisco Systems Inc. (NASDAQ: CSCO): Q3 Earnings Preview 2011

Cisco Systems Inc. (NASDAQ: CSCO), the world's largest computer networking gear maker, is scheduled to release its fiscal third-quarter earnings after the market close on Wednesday, May 11, 2011. Analysts, on average, expect the company to report earnings of 37 cents a share on revenue of $10.86 billion. In the year ago quarter, the company reported earnings of 42 cents per share on revenue of $10.37 billion. 

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP)-based networking and other products to the communications and IT industry worldwide. The company is often considered as a technology-industry bellwether as it dominates the market for routers and switches.

In the preceding fiscal second-quarter, the San Jose, California based company's net income was $1.5 billion, or 27 cents per share, compared to a profit of $1.9 billion, or 32 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 37 cents a share in the second quarter. Revenue climbed 6% to $10.41 billion from $9.82 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 35 cents a share on revenue of $10.23 billion.

At its last earnings call in February, Cisco CEO John Chamber said the company expects third quarter net sales to grow 4% to 6% year-over-year, implying third quarter net sales of $10.78 billion to $10.99 billion. Third quarter non-GAAP earnings per share is expected to range from 35 cent to 38 cents per share while GAAP EPS is expected to range from 8 cents to 10 cents per share. The company expects non-GAAP operating margins to be in the range of 23% to 24% for the quarter. For the fourth quarter ending in July, Cisco expects revenue to grow between 8% and 11%.

Revenue growth for the full year is projected to be in the mid-to low-end of our previously mentioned range of 9% to 12%. For the rest of the fiscal year, the company anticipates non-GAAP total gross margin to be in the range of 62% to 63% with GAAP total gross margin to be approximately 2% lower.

Cisco's global operations and a clientele spanning businesses and government agencies has made it one of the technology sector's bellwethers. The management team's record of controlling costs and growing the business through acquisitions also made them a darling of tech investors over the years. Cisco has also diversified in recent years.

Recently, the company announced a restructuring of its consumer business, including closing down the Flip video camera business. Cisco said that it will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities -- core routing, switching and services; collaboration; architectures; and video. The company said it expects to recognize restructuring charges to its financial results, with an aggregate pre-tax impact not exceeding $300 million during the third and fourth quarters of fiscal 2011. The company also expects a reduction of about 550 employees in the fourth quarter of fiscal 2011.

However, a fragile global economy has proven more damaging than initially expected. Moreover, competition in the company’s core markets has been intensifying for some time. On the bright side, Cisco has been diverting resources to rapidly enter a wide range of adjacent businesses in relatively short order. According to industry experts, Cisco still faces competitive hurdles, as other big tech giants, including one-time partner Hewlett-Packard (NYSE: HPQ), scramble for a larger piece of the corporate IT market, especially with the shift toward cloud computing, which is boosting the demand for data center systems. Cloud computing allows companies to tap computing power through a network instead of in-house data centers. 

During the quarter in review, the company said that it would begin paying a dividend for the first time in its history. The company's board of directors approved a quarterly cash dividend of 6 cents a share. 

Full Disclosure: None.

Cisco Systems Inc. (NASDAQ: CSCO): Q2 Earnings Preview

Cisco Systems Inc. (NASDAQ: CSCO) is scheduled to release its fiscal second-quarter earnings after the market close on Wednesday, February 9, 2011. Analysts, on average, currently expect the company to report earnings of 35 cents a share on revenue of $10.23 billion. In the year ago quarter, the company reported earnings of 40 cents per share on revenue of $9.82 billion. Cisco hasn’t missed profit estimates since at least 2005.

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP)-based networking and other products to the communications and IT industry worldwide. The company is often considered as a technology-industry bellwether as it dominates the market for routers and switches.

The company's business segments for financial data reporting are defined by geographic region or "theaters": United States and Canada, European Markets, Emerging Markets, Asia Pacific, and Japan. The U.S./Canada segment provided 54.3 percent of fiscal 2010's total revenue. 

In the preceding fiscal first-quarter, the San Jose, California based company's net income was  $1.93 billion, or 34 cents a share, compared to $1.79 billion, or 30 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 42 cents a share in the latest quarter. Revenue climbed to $10.75 billion from $9 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 40 cents per share on revenue of $10.74 billion. 

Cisco's global operations and a clientele spanning businesses and government agencies has made it one of the technology sector's bellwethers. The management team's record of controlling costs and growing the business through acquisitions also made them a darling of tech investors over the years. But a fragile global economy has proven more damaging than initially expected. At its last earnings call in November, Chief Executive John Chambers pointed to “air pockets” in the market, highlighted by weak demand in the government sector. The networking giant said that it expects second quarter net sales to grow 3% to 5% year-over-year, implying second quarter net sales of $10.11 billion to $10.31 billion. For the fiscal year 2011, the company anticipates net sales to grow 9% to 12%, implying net sales of $43.64 billion to $44.84 billion. 

Competition in the company’s core markets has been intensifying for some time. However, Cisco has been diverting resources to rapidly enter a wide range of adjacent businesses in relatively short order. According to industry experts, Cisco still faces competitive hurdles, as other big tech giants, including one-time partner Hewlett-Packard (NYSE: HPQ), scramble for a larger piece of the corporate IT market, especially with the shift toward cloud computing, which is boosting the demand for data center systems. Cloud computing allows companies to tap computing power through a network instead of in-house data centers. 

Overall, after Cisco’s shocking guidance late last year, the company is seen offering a more upbeat view of the coming quarters. The company has said it can grow by entering new markets like data center servers, video conferencing and smart grid technology. But investors said they would like more reassurance that these projects will soon turn more profitable.

Recently, Cisco Systems agreed to buy Inlet Technologies, a privately-held digital media processing firm, for $95 million in cash and "retention-based incentives in exchange for all shares" of the Raleigh, North Carolina-based company. The acquisition is expected to close in within the first half of 2011. Last month, Cisco Systems agreed to acquire privately-held Pari Networks, a provider of network configuration and change management and compliance management solutions that will complement Cisco's smart service capabilities. Based in Milpitas, Calif., with part of its employee base in Hyderabad, India, Pari Networks' technology will integrate into Cisco's smart services and help to manage the health and stability of customer networks. The acquisition is expected to be complete in the third quarter of Cisco's fiscal year 2011, subject to various standard closing conditions. 

During, the company announce that its board of directors has authorized up to $10 billion in additional repurchases of its common stock. Cisco previously authorized up to $72 billion for its current stock buy-back program, according to the statement. Cisco said the stock buy-back program had no fixed termination date.

Full Disclosure: None.

Cisco Systems Inc. (NASDAQ: CSCO): Q1 Earnings Preview 2010

Cisco Systems Inc. (NASDAQ: CSCO) is scheduled to release its fiscal first-quarter earnings after the market close on Wednesday, November 10, 2009. Analysts, on average, currently expect the company to report earnings of 40 cents a share on revenue of $10.73 billion. In the year ago quarter, the company reported earnings of 36 cents per share on revenue of $9.02 billion.

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP)-based networking and other products to the communications and IT industry worldwide. The company is often considered as a technology-industry bellwether as it dominates the market for routers and switches.

The company's business segments for financial data reporting are defined by geographic region or "theaters": United States and Canada, European Markets, Emerging Markets, Asia Pacific, and Japan. The U.S./Canada segment provided 54.3 percent of fiscal 2010's total revenue.

In the preceding fiscal fourth-quarter, the San Jose, California based company's net income was $1.9 billion or 33 cents a share, compared to $1.1 billion or 19 cents a share in the year-ago quarter. On an adjusted basis, the company earned was 43 cents a share in the fiscal-fourth quarter.Revenue rose 27% to $10.8 billion from $8.5 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 42 cents per share on revenue of $10.87 billion. 

For fiscal first quarter, the networking company anticipates total revenue to be up approximately 18% and 20% year over year, implying first quarter net sales of $10.64 billion to $10.82 billion. Total gross margin in fiscal first quarter will be approximatelyin the 64% to 65% range.

In September, Cisco announced its intention to issue a dividend during the current fiscal year ending July 30, 2011. The company is likely to issue a dividend yield of 1% to 2%. 

Cisco is likely to benefit from a rebound in corporate technology spending. According to technology research firm Forrester, worldwide IT spending is expected to increase 8.1 percent in 2010.

Last month, Cisco introduced Cisco umi telepresence, a first-of-its-kind consumer product that brings family and friends together in HD video at the touch of a button, whether they are around the corner or across the country. Cisco is also working with Verizon to bring the umi experience to Verizon FiOS customers early next year. The two companies have been conducting successful trials of Cisco umi over Verizon's 100 percent fiber-optic network, which delivers what a 2010 PCMAG.COM reader's survey rated the fastest Internet speeds in the United States.

Among other developments, Cisco completed its acquisition of privately-held ExtendMedia Corporation, a leading provider of software-based Content Management Systems that manage the entire lifecycle of video content through monetization for pay media and ad-supported business models. The company also completed its acquisition of privately held Arch Rock Corporation, a pioneer in Internet Protocol-based wireless network technology for smart-grid applications.

The company's stock currently trades at a forward P/E (fye 31-Jul-12) of 12.26 and PEG Ratio (5 yr expected) of 1.10. 

Full Disclosure: None.

Cisco Systems Inc.(NASDAQ: CSCO): Q2 Earnings Preview 2010

Cisco Systems Inc.(NASDAQ: CSCO), the world's largest networking equipment maker, is scheduled to release its fiscal second-quarter 2010 financial results after the closing bell on Wednesday, February 3, 2009. Analysts, on average, expect the company to report earnings of 35 cents a share on sales of $9.40 billion. In the year ago period, the company reported earnings of 32 cents per share on sales of $9.09 billion.

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol-based networking and other products to the communications and IT industry worldwide. The company is often considered as a technology-industry bellwether as it dominates the market for routers and switches. With the U.S. economy returning to growth path last quarter following four consecutive quarters of declines, technology spending by corporates is poised to increase.

In the preceding fiscal first quarter, the San Jose, Calfornia-based company's profit fell 19% to $1.8 billion or $0.30 per share, compared to $2.2 billion or $0.37 per share in the comparable quarter last year. On an adjusted basis, the company earned $2.1 billion or $0.36 per share, compared to $2.5 billion or $0.42 per share in the prior year quarter. Revenue dropped 12.7% to $9.02 billion from $10.33 billion in the same quarter last year. Analysts, on average, expected the company to earn $0.31 per share on revenue of $8.74 billion.

Gross margin for the first quarter improved to 65.3% from 64.7% in the year-ago quarter and 63.9% in the previous quarter.

For fiscal second quarter, the networking company anticipates total revenue to be up approximately 1% to 4% year over year. From a sequential perspective, the company expects to see approximately 2% to 5% growth. Total gross margin in Q2 will be approximately 64% to 65%. Regarding cash flow from operations, Cisco expects to generate $1.8 billion to $2.1 billion during the second quarter.

Cisco is likely to benefit from a rebound in corporate technology spending. According to technology research firm Gartner Inc., worldwide IT spending is expected to increase 4.6 percent to $3.4 trillion in 2010, on the back of an economic recovery and a declining dollar.

Early this month, Cisco Systems said that it will restructure Asia Pacific and Japan operations to support its investments and growth plans, and accordingly it will create a separate Greater China Theater. The restructuring will enable a more focused strategy and investment of resources to countries within the region. Japan, Greater China and Asia Pacific Theaters comprise about 15% of Cisco's worldwide revenue.

Last month, the technology bellwether completed the acquisition of Starent Networks Corp., a supplier of Internet Protocol-based mobile infrastructure solutions. Cisco expects the acquisition to be dilutive to non-GAAP earnings in fiscal years 2010 and 2011 and accretive to non-GAAP earnings in fiscal 2012. It also completed the acquisition of ScanSafe, Inc., a povider of software-as-a-service Web security solutions, based in London and San Francisco.

The company's stock currently trades at a forward P/E (fye 25-Jul-11) of 13.82 and PEG Ratio (5 yr expected) of 1.37. In terms of stock performance, Cisco shares have rallied 37 percent over the past year.

Full Disclosure: None.