Cisco takes out more enterprise/telecom tech names


The list of enterprise hardware/software, telecom equipment, and component/chip suppliers selling off (previous) due to Cisco's poor guidance and order data now includes Oracle (ORCL -2.4%), EZchip (EZCH -6.1%), Riverbed (RVBD -6%, shot higher yesterday on M&A hopes), NeoPhotonics (NPTN -6.6%), Ixia (XXIA -4.7%), Oclaro (OCLR -4%), Procera (PKT -2.3%), and Alliance Fiber (AFOP -3.8%).

Cisco's weak service provider (-13% Y/Y) and emerging markets (-12%) orders are worrying investors in peers/suppliers, particularly given some peers (I, II) have also reported of soft carrier and/or EM demand. John Chambers' admission the NSA spying scandal has affected sales in China (orders -18%) also isn't going over well.

However, many on the sell-side argue a big portion of Cisco's problems are tied to company-specific product issues.

H-P (HPQ -5.6%), which has plenty of Chinese exposure, has added considerably to yesterday's AH losses, and so have Ciena (CIEN -5.3%) and Finisar (FNSR -10%). H-P's FQ4 report is due on Nov. 26, and Ciena's FQ4 report arrives on Dec. 12.

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Comments (3)
  • investingInvestor
    , contributor
    Comments (2556) | Send Message
     
    Historically, John Chambers has been honest and frank without excuses in forecasting short and medium term sales.

     

    I review his official statements carefully in order to see his view of the world.

     

    I expect Chambers to be right again.
    14 Nov 2013, 10:37 AM Reply Like
  • jstratt
    , contributor
    Comments (4012) | Send Message
     
    One has to question the prospects for established technology names. HPQ was easy to understand when it dived. IBM had been showing signs of weakness for a year prior to its fall.

     

    CSCO just took out the quarter and the next year for its stock. Can you believe it is still up 33% for the year?

     

    Lets see the company market cap is worth 91 bil and has 51 bil in cash so the business is worth 40 bil with 12.69 bil of Operating cash flow so thats 3.15 times cash flow.

     

    I still think the NSA spy issues caused the drop and that is why I sold 1/3 before earnings.
    14 Nov 2013, 03:47 PM Reply Like
  • jstratt
    , contributor
    Comments (4012) | Send Message
     
    I made an error in calculation above 114.55 mkt cap less 50.61 cash = 63.94 / 12.69 operating cash flow = 5.04 Mkt Cap/Cash Flow
    14 Nov 2013, 05:43 PM Reply Like
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