Thu, May 19, 12:05 PM
- Cisco Systems (NASDAQ:CSCO) is up 3.2% following a strong fiscal Q3 where it strengthened gross margin, and a rack of analysts bumping price targets today.
- More than a half-dozen firms raised targets. Drexel Hamilton (Buy) has one of the highest targets, at $36 (implying 31% upside from today's raised price of $27.58).
- Robert Baird reiterated its Outperform rating and raised its target to $32 from $30, viewing the company as "better positioned than many investors fear relative to public cloud and software-defined solutions. Product gross margin was again very solid even after adjusting for the extra week. CSCO is our best value idea for 2016."
- UBS worried about product softness, but noted that linearity returned to normal despite a weak macro environment. "Product declines in switches (-3%) and routers (-5%) and meager 1% growth in data center were concerning, but eased by double-digit order growth in data center switching." The firm's Steven Milunovich reiterated a Buy and bumped his price target to $30 from $29, calling Cisco the best-positioned legacy vendor and expected growth at the low end of a long-term 3-6% goal.
- Also raising targets: Barclays (Overweight), to $31 from $29; Credit Suisse (Underperform), to $24 from $22; RBC Capital (Outperform), to $33 from $31; BMO Capital Markets (Outperform), to $32 from $30.
- Now read Cisco: The Secret Sauce Is Services And Software »
Wed, May 18, 5:38 PM
Wed, May 18, 4:39 PM
- Boosting Cisco's (NASDAQ:CSCO) FQ3 EPS: Non-GAAP gross margin was 65.2%, up 100 bps Q/Q and 60 bps Y/Y, and above guidance of 62.5%-63.5%. FQ4 GM guidance is at 63%-64%.
- Top-line performance: Product revenue rose 1% Y/Y to $8.9B. Services revenue (lifted by Cisco's efforts to drive a mix shift towards services) rose 11% to $3.1B. Americas revenue +4%, EMEA -2%, Asia-Pac +10%.
Switching product revenue -3% to $3.4B, routing -5% to $1.9B, collaboration +10% to $1.1B, data center (UCS server) +1% to $811M, wireless (Wi-Fi-driven) +1% to $615M, service provider video (excludes the divested set-top unit) +18% to $468M, security (lifted by both M&A and organic growth) +17% to $482M.
- Financials: Operating expenses rose 4% Y/Y to $4.2B (35.2% of revenue). $649M was spent to buy back 27M shares at an average price of $24.08. the deferred revenue balance (lifted by software subscriptions and service contracts) rose 8% to $15.3B. Cisco ended FQ3 with $63.5B in cash/investments ($6.3B in the U.S.) and $28.6B in debt.
- CSCO +5.2% after hours to $28.10. The 52-week high is $29.85.
- Cisco's results/guidance, earnings release
Wed, May 18, 4:08 PM
- Cisco (NASDAQ:CSCO): FQ3 EPS of $0.57 beats by $0.02.
- Revenue of $12B (-1.2% Y/Y) beats by $30M.
- Expects 0%-3% Y/Y normalized FQ4 revenue growth (excludes Cisco's divested set-top business) and EPS of $0.59-$0.61. Consensus is for a 3.3% official revenue decline and EPS of $0.58.
- Shares +4.5% after hours.
- Press Release
Tue, May 17, 5:35 PM
Fri, May 13, 3:14 PM
- A shift to cloud services (and lower-cost hardware in data centers) isn't good for Cisco Systems (NASDAQ:CSCO), JPMorgan says in a note.
- Data infrastructure spending will fall at 2% annually from 2016-2020, says analyst Rod Hall, but workloads are moving at a faster rate to infrastructure-as-a-service providers like Amazon, Microsoft and Google.
- “A near-tripling of public cloud workloads represents a monumental architectural shift, which shows no signs of abating and is likely to create a major ripple effect across the entire technology landscape,” he says, making up a material earnings risk for the world's Ciscos.
- "Though companies like Cisco focus on the increased bandwidth required for big data," he says, "they miss the fact that this inevitably drives companies to want to deploy commodity (data center) solutions faster in our opinion.”
- Now read Retired Investors Should Give This Blue-Chip Technology Stalwart A Close Look »
Tue, May 10, 1:50 PM
- Growth stocks have outperformed value stocks each year since 2007, but value investors are often rewarded after such periods. C.T. Fitzpatrick, the CIO of Vulcan Value Partners and the manager of Vulcan Value Partners Fund (MUTF:VVPLX), who has beaten the S&P 500 and its peers every year for the past five years gave his 4 value picks in an interview with Barron's.
- Oracle (NYSE:ORCL) is his top pick. Oracle and SAP (NYSE:SAP), both are leaders in the big enterprise market, but Oracle is in a better position with its applications plus database products along with being ahead in converting its customers to the cloud.
- National Oilwell Varco (NYSE:NOV) is a value pick since it generated tremendous free cash flow despite a poor quarter.
- Anthem (NYSE:ANTM) is a new addition since its business model is well-suited for the Affordable Care Act. Fitzpatrick believes that the company's stock price doesn't reflect the fundamentals.
- United Technologies (NYSE:UTX) gets interest as it has generated high free cash flow despite its bottom line being hurt by the strong dollar. Their accretion of cash is helping return on capital thereby making it a value pick.
- His top 10 holdings as of Dec. 31 are Oracle, Parker Hannifin (NYSE:PH), National Oilwell Varco, Franklin Resources (NYSE:BEN), Discovery Communication (NASDAQ:DISCK), Swiss RE AG, MasterCard (NYSE:MA), Cisco Systems (NASDAQ:CSCO), Anthem and Boeing (NYSE:BA).
Mon, May 2, 7:56 AM
- April monthly performance was: -0.42%
- $0.06 in dividends were paid in April
- Top 10 Holdings as of 3/31/2016: Coca-Cola Co (KO): 4.27%, Microsoft Corp (MSFT): 3.51%, Altria Group Inc (MO): 3.33%, Apple Inc (AAPL): 3.31%, AbbVie Inc (ABBV): 2.67%, International Business Machines Corp (IBM): 2.38%, McDonald's Corp (MCD): 2.09%, Cisco Systems Inc (CSCO): 1.95%, 3M Co (MMM): 1.84%, Home Depot Inc (HD): 1.81%
Mon, Apr. 25, 4:46 AM
- With Facebook (NASDAQ:FB) CEO Mark Zuckerberg aiming to triple the company's 1.6B members, the social network is looking to ensure that building telecom networks and using the Internet becomes cheaper as the vast majority of potential users live in developing countries.
- As such, Facebook has embraced open-source technology and the company does its own work on planning the computer hardware and software it uses.
- "Our rule is 10 times faster or 10 times cheaper or both," says Facebook VP of Engineering Jay Parikh.
- The likes of Google and Amazon are using similar strategies, while equipment providers such as Cisco (NASDAQ:CSCO) are joining in as they'd "rather be on the train than in front of it."
Sun, Apr. 24, 11:41 PM
- The Information reports Google (GOOG, GOOGL) is building a startup incubator called Area 120. Teams of Google employees will be able to submit business plans to join Area 120, and those accepted can work on their projects full-time for a few months. Afterwards, they’ll be able to pitch Google on creating a new company that Google would take a stake in.
- Like other tech giants, Google has seen plenty of talented workers depart over the years to launch startups, with some of the efforts proving to be huge successes (examples include Twitter and Instagram). Area 120 represents an attempt to keep such entrepreneurial workers within the Google empire (to an extent), and profit along the way.
- Cisco (NASDAQ:CSCO) has some experience in this field, via “spin-ins” such as data center switch developer Insieme Networks (founded by Cisco engineers and acquired in full in 2013 for $863M). However, new CEO Chuck Robbins has suggested he’s not a big fan of the spin-in model, and would rather have small internal startup teams whose work remains fully owned by Cisco.
Tue, Apr. 19, 3:21 AM
- Partnering with Cisco Systems (NASDAQ:CSCO), Hyundai (OTC:HYMLF) has joined the ranks of global automakers turning to new technologies as the race to develop internet-connected cars picks up pace.
- The alliance with Cisco comes after the South Korean carmaker this month revealed a road map to developing "hyper-connected intelligent cars" as part of a long-term push into driverless vehicle technology.
Mon, Apr. 11, 4:31 PM
- Juniper Networks (NYSE:JNPR) now expects Q1 revenue of $1.09B-$1.1B and EPS of $0.35-$0.37. That's below prior guidance of $1.15B-$1.19B and $0.42-$0.46, and a consensus of $1.18B and $0.45.
- The networking hardware vendor primarily blames "weaker than anticipated demand from Enterprise and timing of deployments of certain U.S. and EMEA Tier 1 Telecoms." It previously issued soft Q1 guidance in January, while blaming "the uncertainty of the near term global macro environment and potential lumpiness in customer investment patterns." Official Q1 results are due on the afternoon of April 28.
- Juniper is down 8.4% after hours to $22.79. Carrier router archrival Cisco (NASDAQ:CSCO) is down 1.5% to $27.20. In February, Cisco reported its service provider orders were up 5% Y/Y in FQ2 (the January quarter).
Mon, Apr. 4, 7:25 AM
- March monthly performance was: +6.95%
- 52-week performance vs. the S&P 500 is: +1%
- $0.07 in dividends were paid in March
- Top 10 Holdings as of 2/29/2016: Coca-Cola Co (KO): 4.24%, Altria Group Inc (MO): 3.5%, Microsoft Corp (MSFT): 3.45%, Apple Inc (AAPL): 3.13%, AbbVie Inc (ABBV): 2.72%, International Business Machines Corp (IBM): 2.19%, McDonald's Corp (MCD): 2.08%, Cisco Systems Inc (CSCO): 1.91%, 3M Co (MMM): 1.85%, Home Depot Inc (HD): 1.8%
Tue, Mar. 22, 11:57 AM
- In his latest effort to overhaul the company he took over last year, CEO Chuck Robbins has restructured Cisco's (CSCO +0.1%) engineering ops (they employ ~25K people) into four units - Networking, Cloud Services & Platforms, Security, and Applications & IoT - with the head of each unit reporting directly to Robbins.
- As part of the shakeup, Kelly Ahuja, the SVP in charge of Cisco's service provider portfolio/strategy and an 18-year company vet, is leaving. Yvette Kanouff, formerly Cisco's SVP of cloud solutions, is now in charge of an "expanded" service provider organization that's part of the Networking unit. For now, EVP/chief development officer Pankaj Patel is in charge of Networking, but he's due to leave later this year.
- Biri Singh, named CTO by Robbins last year, will be in charge of Cloud Services & Platforms. Robbins adds he has asked Biri to "lead our efforts around Next-Generation Data Center strategy," working closely with the Networking unit and the Insieme SDN unit. He'll be in charge of Cisco's data/analytics efforts and the Intercloud platform, and oversee a Computing Systems Product Group led by SVP Liz Centoni..
- SVP David Goeckler will continue to be in charge of Security products. Rowan Trollope, SVP of Cisco's IoT and Collaboration Technology Group, will be in charge of the IoT & Applications unit.
- Eight months ago: Robbins goes outside Cisco to appoint CTO, chief digital officer
Fri, Mar. 11, 11:08 AM| Fri, Mar. 11, 11:08 AM | 1 Comment
Wed, Mar. 9, 7:20 PM
- IDC estimates the enterprise Wi-Fi market grew 5.9% Y/Y in Q4, and 3.7% over the whole of 2015. The firm blames recent slow growth on macro uncertainty and delayed spending ahead of the full availability of (mobile-friendly) Wave 2 802.11ac Wi-Fi systems. The consumer market, where firms like Netgear (NASDAQ:NTGR) and D-Link compete, declined 3.9% in Q4 and 4.8% in 2015.
- Cisco (NASDAQ:CSCO) is still the enterprise market's dominant vendor, even if its share has been slipping a bit. IDC respectively assigns Cisco Q4 and full-year enterprise Wi-Fi shares of 45% and 47%, down from 48.1% and 47.8% a year earlier. Cisco's wireless revenue (dominated by Wi-Fi) was flat Y/Y in the company's January quarter at $613M.
- #2 HP Enterprise (NYSE:HPE), which acquired Wi-Fi hardware/software vendor Aruba Networks last year for $3B, is estimated to have a 16.9% 2015 share (up 70 bps Y/Y) after factoring sales from both Aruba and HP proper. Thanks in part to Aruba, HPE reported 54% Y/Y networking sales growth for its January quarter, allowing the company's enterprise hardware unit to see positive growth in spite of server, storage, and tech services declines.
- #3 Ruckus Wireless (NYSE:RKUS) is estimated to have a 6.9% share, up from 2014's 6.3%. Aerohive (NYSE:HIVE), which has benefited from the FCC's E-Rate program for school broadband connectivity, is assigned a 2.1% share.
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking products and services related to the communications and information technology industry. It provides a broad line of products for transporting data, voice, and video within buildings and across campuses. The... More
Industry: Networking & Communication Devices
Country: United States
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