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Cisco lowers growth outlook, peers/suppliers fall in sympathy

  • Cisco (CSCO -2.3%) is now targeting annual revenue growth of 3%-6% over the next 3-5 years, down from a prior 5%-7%, says CFO Frank Calderoni states at the networking giant's analyst meeting. In addition, Calderoni says Cisco's FY14 (ends July '14) revenue growth outlook is "basically" in-line with a Street forecast for a 4% decline.
  • Cisco is now aiming for services revenue growth of 7%-10% over the next 3-5 years, down from 9%-11%; services accounted for 22% of Cisco's Oct. quarter revenue. Businesses related to "enabling the cloud" (a somewhat nebulous term) are expected to show a 12%-18% growth rate.
  • Cisco, already pressured by John Chambers' macro comments, continues to trade lower. Many networking equipment peers and component/chip suppliers are also selling off; in addition to Cisco, Ciena's mixed FQ4 results and slightly soft FQ1 guidance could be playing a role here.
  • Notable networking equipment/component/chip decliners: JNPR -3.1%. BRCM -2.5%. PKT -2.8%. FFIV -2.2%. ERIC -2.1%. JDSU -1.9% (getting pulled from the S&P 500). AFOP -5.5%. CAVM -1.7%. AMCC -1.8%. BRCD -1.8%. MRVL -1.6%. ARUN -1.7%. CALX -1.7%.
Comments (2)
  • WisPokerGuy
    , contributor
    Comments (777) | Send Message
     
    CSCO is dirt cheap right now. You know what? It's going to get a lot cheaper. Sometimes the market tells you what to do with a particular stock. The share price is still too high & John Chambers is still the same disaster as a CEO that he's always been. I might consider getting in under $18 with some long dated call options but CSCO has been "dead money" for so long, there always seems to be easier places to make a buck.
    12 Dec 2013, 02:36 PM Reply Like
  • Nettligent
    , contributor
    Comments (1345) | Send Message
     
    I do not like what I see but the painful reality is real in industry. CIEN FFIV AMCC CAVM CALX are so much speculation and hype. Thanks Cisco for their candid assessments.
    12 Dec 2013, 03:21 PM Reply Like
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