Cisco reported third quarter net sales of $8.9 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.9 billion or $0.30 per share, and non-GAAP net income of $2.1 billion or $0.34 per share. Scientific-Atlanta, Inc., acquired on February 24, 2006, contributed net sales of $752 million during the third quarter of fiscal 2007, compared with $407 million during the third quarter of fiscal 2006.
Analysts were expecting the company to earn $0.33 on $8.8 billion in sales for the quarter. The company also guided in line, which seems like an impressive feat given the worrying signs noted above. Yet despite these signals it appears many were counting on an unlikely blowout. According to a Reuters article:
"Expectations are definitely going up. Some people were looking for a bigger beat,” said Tim Daubenspeck, an analyst at Pacific Crest Securities.
Those expectations appear wildly off base. At this point, we question whether the company can even pull of the in-line guidance cleanly.
CSCO 1-yr chart: