Cisco Shares Up Ahead of Earnings

Cisco (CSCO) shares are nicely higher ahead of the company’s announcement after the close of results for its fiscal second quarter ended January. The Street is looking for revenue of $9.79 billion and EPS of 38 cents. Cisco previously forecast growth of 16% sequentially, which would be $9.74 billion. One quarter ago, Chambers said growth for the July fiscal year would be 13%-16%, within its long term target of 12%-17%.

As I’ve been reporting for the last two days, expectations are mixed. Most analysts seem to think that the quarter will be in line, but perhaps with softness from U.S. enterprise customers. The real focus is on the guidance, both for the April quarter specifically, and for overall demand.

Last time around, Cisco shares tumbled after the earnings report, with investors largely focused on the comment from CEO John Chambers that demand from U.S. enterprise customers was down year over year. That drove down not only Cisco shares, but also those of other major IT vendors, in particular Oracle (ORCL), which has significant exposure to the financial sector.

Interestingly enough, stocks with high corporate IT spending exposure are rallying today ahead of Cisco’s call. Cisco itself is up 58 cents, or 2.4%, to $23.84. Oracle is up 70 cents, or 3.6%, to $19.96. SAP (SAP) is up 93 cents, or 2%, to $47.28. VMware (VMW) is up $1.71, or 2.9%, to $61.01.

One other note: Cisco shares even after today’s modest rally are down $8.91, or about 27%, since closing at $32.75 on November 7, the date of their last earnings announcement - the slide has wiped out $54 billion in market value.