Cisco Systems, Inc.NASDAQ
Mon, Nov. 21, 2:25 PM
- By the U.S. Customs and Border Protection, effectively lifting restrictions on import of associated products to the United States. The ITC, though, is noted to remain unbound by the CBP decision and that the ruling could be modified or revoked should errors or other conflict with future findings be determined.
- Subsequent analyst reaction – Arista Networks (NYSE:ANET) target raised from $84 to $95 (current price $94.54) at RBC Capital Markets (Sector perform) and from $93 to $110 at BMO Capital Markets (Outperform).
- Previously (August 23) – Cisco: Trade Representative upholds import ban on Arista Networks
- Previously (June 23) – ITC upholds Cisco victory in Arista patent case; ANET -3.8%
Fri, Nov. 18, 10:53 AM
- After falling 4.8% yesterday in the wake of downbeat guidance from its fiscal Q1 results, Cisco Systems (NASDAQ:CSCO) is moderating somewhat so far today, +0.6%.
- Analyst lowered estimates accordingly but overall look bullish with several holding their Buy ratings. Credit Suisse is the standout, reiterating at Underperform with the company "running out of levers." The 7% decline in the company's switching gear is indicative of losing share in the data center area, it says.
- Conversely, Deutsche Bank held a Buy rating and $37 price target, implying more than 22% upside. Drexel Hamilton trimmed its price target to $36 from $37.
- Jefferies is staying bullish as well, noting “the disruption in near-term sales associated with Cisco’s move toward SaaS/recurring revenue and their propensity to sandbag guidance from time to time." It's got a Buy rating and $35 target, while cutting fiscal 2017 revenue estimates to $48.17B from $50.21B.
- BMO Capital Markets cut estimates as well, but held an Outperform rating and $33 price target: "The stock has typically performed well after revenue resets, and we expect the same dynamic this time around."
Wed, Nov. 16, 5:36 PM
Wed, Nov. 16, 5:31 PM
- Cisco Systems (NASDAQ:CSCO) is now off 4.3% in postmarket trading, after a quarter where it beat analyst expectations but issued downbeat guidance as it modeled little near-term improvement in its service provider business.
- In product revenues, gains were led by Security (up 11%) and NGN Routing (up 6%); Switching fell 7%, Collaboration fell 3%, Data Center declined 3%, Wireless fell 2% and Service Provider Video dropped 2%. Geographically, the Americas were down 1%, EMEA flat, and APJC up 6%.
- On the company's earnings call, CEO Chuck Robbins said the guidance was conservative predominantly because of "the [service provider] weakness and the capex challenges we've seen in SP. We've done account by account by account analysis to see what's going on there." Not to mention "political and regulatory environments that are somewhat uncertain in the U.S. and around the world."
- "Post-election, I think most CEOs I talk to are pragmatic about the result, and now we are all focused on the policy issues that matter to each of our companies," Robbins said. "I think president-elect Trump appears to be very business-oriented and focused on driving the U.S. economy."
- As far as areas of investment in a new government environment: There's "a lot of room to run" in security, says CFO Kelly Kramer. "Data Centers are a focus for us, and then even in the core we're investing."
- With U.S. policy discussions incorporating the prospect of a cash repatriation holiday (a longtime Cisco wish), cash brought home would be used to address debt and then "a blend of actions," Kramer says, with the dividend, a buyback and strategic activities on the table. What about interest rates, seemingly poised to begin a long rising cycle? "Interest rates go up, they go down; we're committed to growing the dividend."
Wed, Nov. 16, 4:20 PM
- Cisco Systems (NASDAQ:CSCO) is off 3.9% after hours following fiscal Q1 earnings where it beat expectations but gave dim guidance for the out quarter.
- For its coming fiscal second quarter, Cisco is guiding for revenues to decline 2%-4% Y/Y (normalized to exclude the November 2015 divestiture of the SP Video CPE Business), and for non-GAAP EPS of $0.55-$0.57, below consensus for $0.59. It sees GAAP EPS at $0.42-$0.47 vs. consensus for $0.48.
- In its Q1, net income swelled about 3% to $3.1B on a non-GAAP basis; it declined 4% on a GAAP basis, before excluding the divested business.
- Gross margin was 63.8% in total, and product gross margin was 63.4% -- up from 60.9% due to productivity gains and the divestiture.
- Revenue breakout: Products, $9.3B (down 5.5%); Service, $3.05B (up 7.5%).
- Also in guidance, Cisco expects a gross margin rate (non-GAAP) of 63-64%, and operating margin rate of 29-30%, and a tax provision rate of 22%.
- Conference call to come at 4:30 p.m. ET.
- Press Release
Wed, Nov. 16, 4:07 PM
Wed, Nov. 16, 10:18 AM
- India's Reliance Group and Cisco Jasper (NASDAQ:CSCO) are teaming up on a joint venture they call "Unlimit," to provide Internet-of-Things service for enterprise customers in the country.
- Customers will use the Unlimit Control Center, built off Cisco's IoT management platform and Reliance's mobile network.
- The collaboration is also set to provide full support for smart city initiatives throughout India (a government program aims to build 100 smart cities).
- Cisco is set to report earnings just after the market close today.
Tue, Nov. 15, 5:35 PM
Mon, Nov. 14, 4:23 PM
- Cisco Systems (NASDAQ:CSCO) is set to report on its first quarter Wednesday, and Drexel Hamilton is looking for a beat based on continuing solid execution.
- The stock has a depressed valuation, figures analyst Brian White, who has a Buy rating and target price of $37, implying near 18% upside from today's close.
- “Trends across the tech supply chain as it relates to networking/telecom programs and demand within our networking coverage this earnings season were a bit healthier compared to a year ago," he writes. "As such, we feel comfortable with the overall demand backdrop for Cisco but we also don't expect meaningful revenue upside.”
- He sees EPS of $0.59 and revenue of $12.28B for Cisco's fiscal Q1, vs. consensus expectations for $0.59 EPS and revenue of $12.329B. Drexel expects fiscal Q2 EPS of $0.59 and revenue of $12.16B, in line with other analysts.
Thu, Nov. 10, 3:21 PM
- Ericsson (NASDAQ:ERIC) has gained 3.9% in U.S. trading after the company put out new expectations, an outlook that wasn't as bearish as analysts had feared.
- "We have a tough market situation out there," said acting CEO Jan Frykhammar to investors, though he pointed to gaining momentum in the company's partnership with Cisco Systems (CSCO -0.7%).
- Ericsson's been dogged by weaker industry demand for mobile broadband equipment, and shares have fallen 46.6% year-to-date on Nasdaq.
- The company expects average annual growth in its products and services market areas of 1-3% from 2016 to 2018, down from last year's forecast of 2-4% market growth from 2014-2018. Negative trends from the first half are expected to prevail for at least two or three more quarters.
- The Cisco team-up started slow but is gaining traction, Ericsson says, with more than 60 joint customers and several areas of collaboration ahead.
- "We understand that we need to perform better but you also as investors need to give us some time," Frykhammar said.
- Previously: Ericsson's new CEO builds stake (Oct. 28 2016)
- Previously: New Ericsson chief: Reinvestment will drive top line (Oct. 26 2016)
Wed, Nov. 9, 4:58 AM
- Donald Trump's call for a repatriation holiday of 10% for the more than two trillion dollars in corporate cash parked overseas is now closer to reality.
- He has also promised the biggest tax revolution since Ronald Reagan, pledging that no American business would pay more than 15% of their profits in tax, compared with a current maximum of 35%.
- Top 10 U.S. companies with cash overseas: MSFT, GE, AAPL, PFE, IBM, MRK, GOOG, GOOGL, JNJ, CSCO, XOM
Sat, Nov. 5, 5:10 PM
- Brian Belski, chief investment strategist at BMO Capital Markets, says investors too often focus on "yield alone." Instead, he says they should look for companies with proven track records of steady payout growth.
- In a recent screen he developed, he looked for companies that had no dividend cuts in each of the past five completed fiscal years, and filetered for stocks with yields higher than that of the S&P 500 (~2.2%); payout ratios below the market's 50.4% level; FCF yields that exceed their dividend yields; and one-year dividend-per-share growth better than the S&P 500's median of 7.7%.
- Names it turned up include Amgen (NASDAQ:AMGN), Cisco (NASDAQ:CSCO), Harley-Davidson (NYSE:HOG), Home Depot (NYSE:HD), Illinois Tool Works (NYSE:ITW), KeyCorp (NYSE:KEY), Motorola Solutions (NYSE:MSI), and Texas Instruments (NYSE:TXN).
- Source: Barron's
Mon, Oct. 31, 3:57 PM
- Brocade Communications (NASDAQ:BRCD) is up 22.3% and hanging right at 52-week high range after news that it's in talks to sell itself and getting close to the end of that process.
- A deal could be announced this week, Bloomberg reports, and one of the interested parties is reportedly Broadcom (AVGO +0.7%), which could be interested in supplementing its switch-chip business with Brocade's networking gear. Broadcom CEO Hock Tan has said he's interested in acquisitions.
- Such a deal might allow for better competition against much bigger rival Cisco Systems (CSCO +0.4%). "A purchase by Broadcom (Avago) would be a strategic move by Broadcom to vertically integrate in an IP switching and routing market that has increasingly moved to merchant silicon," notes Stifel analyst Aaron Rakers.
- He's maintained a Hold rating and $10 price target (the boost today has put Brocade at $10.63). He doesn't know any inside information about activity around Brocade this week but notes that for years, talk has persisted that Brocade might sell itself to suitors like H-P (NYSE:HPQ), Oracle (NASDAQ:ORCL) or IBM (NYSE:IBM).
- With current net debt (about $440M) and at $11/share, Brocade would come at about a $4.9B enterprise value, 7.3 times EBITDA, he says.
Mon, Oct. 17, 5:32 PM
- Cisco Systems (NASDAQ:CSCO) has added Google vet Amy Chang to its board, effective today.
- Chang is the founder and CEO of "relationship intelligence platform" firm Accompany since its creation in 2013. Prior to that, she spent 2005-2012 with Google, most recently ats Global Head of Product, Google Ads Measurement and Reporting.
- She also held previous roles at eBay and as a consultant with McKinsey & Co., specializing in semiconductors, software and services.
- She'll get pro rata amounts of each of the standard board $75,000 annual retainer and restricted stock of grant date fair value of $215,000.
Wed, Sep. 28, 12:34 AM
- Cisco Systems (NASDAQ:CSCO) will invest more than $4B in expansion in Mexico, the country says.
- Mexico's government said that Cisco CEO Chuck Robbins announced the plans during a meeting with Mexico's president, Enrique Pena Nieto.
- The investments, to come between 2016 and 2018, would create 270 jobs and 77 indirect jobs, the government said in a statement.
- Elsewhere, Bank of America reiterated its Neutral rating on Cisco, with a $33 price target (implying about 5% upside from yesterday's close).
Fri, Sep. 23, 7:30 PM
- Cisco Systems' (CSCO -1%) ongoing appetite for snapping up companies -- with Imperva perhaps next -- shouldn't worry dividend-focused investors, analysts say.
- The company raised its dividend 24% in February, to $0.26/quarter; forward yield now is 3.28% -- still higher than Intel's (2.77%), Microsoft's (2.7%) and Apple's (1.99%).
- Cisco's expected to keep generating free cash flow, and much of its cash on hand is overseas (only $6B held domestically). Moody's analyst Richard Lane expects the company will generate about $7B in free cash flow each year and "management will retain significant liquidity and financial flexibility."
- And the company's move up the stack -- toward more software and services -- should keep pushing profit margin expansion, along with the company's job cuts.
- Previously: Salesforce, Cisco enter into strategic alliance (Sep. 22 2016)