Thu, Jun. 23, 5:50 PM
- The International Trade Commission has upheld a February finding that Arista Networks (NYSE:ANET) infringed on three of Cisco Systems' (NASDAQ:CSCO) patents, handing Cisco a key win.
- ANET is down 3.8% after hours.
- The commission also recommended an import ban on Arista's infringing products. The patents in question have to do with managing and securing communications networks.
- While the ITC has granted the import ban, it may take resolution of the two companies' ongoing countersuits to settle any damages.
- An administrative law judge had previously found that Arista had infringed Cisco's '537, '592 and '145 patents.
Wed, Jun. 15, 7:48 AM
- There are "modest downside risks" to consensus estimates, says analyst Simona Jankowski, downgrading Cisco (NASDAQ:CSCO) to Neutral from Buy. She also cuts the PT to $32 from $35 (last night's close was $28.96).
- Jankowski expects earnings growth to slow though fiscal 2018 as server share gains level off and buybacks slow.
- Shares -2% premarket to $28.36.
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
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).
Fri, Mar. 11, 11:08 AM| Fri, Mar. 11, 11:08 AM | 1 Comment
Thu, Feb. 11, 1:20 PM
- Even with equity markets selling off once again, Cisco (CSCO +9.8%) has held onto the after-hours gains seen yesterday after the company beat FQ2 estimates, issued in-line FQ3 guidance, announced a $15B buyback hike and $0.05/share dividend hike, and reported product orders rose 2% Y/Y (better than feared).
- Jefferies' George Notter has upgraded Cisco to Buy, and upped his target by $1.50 to $27.50. He cites the dividend hike, a historically low valuation (6.4x Jefferies' base 2017 EPS estimate), a belief Cisco will offset the impact of macro pressures by cutting costs, and lower concerns about emerging markets exposure. He also thinks Cisco "has an opportunity to capture significant new growth opportunities in Security and/or Hyper-converged Storage."
- Raymond James' Simon Leopold (Outperform, $28 target): "We believe Cisco continues to execute well while undertaking a business transition to a more software centric model. Some softening, such as enterprise switching, will fuel worries about the macro-environment, but Cisco’s Service Provider sales provides offsets ... the software story remains attractive: ACI’s run-rate is over $2 billion, SaaS grew in the double digits (WebX, Meraki, Security), and security deferred revenue grew 26%."
- Piper's Troy Jensen (Overweight rating, $30 target): "[W]e continue to believe CSCO’s product portfolio is strengthening in the marketplace ... Also, as shown by the sequential margin improvement we believe the company is making good strides with cost controls. Given the global macro growth concerns we do believe weaker spending habits could prevail in the near future, but with a ~4.6% dividend yield, and a $15B increase to its stock repurchase program, we believe shares are too cheap to ignore."
- Nomura's Jeff Kvaal (Neutral, $30 target) isn't as enthusiastic about Cisco's numbers. "[U]npacking the moving pieces suggests Cisco’s macro concern is indeed showing up in the numbers. Business slowed to below plan immediately entering 2016 across the globe. The greatest impacts were in switching (down 13% QoQ) and former growth driver data center (down 4% QoQ) ... Product deferred revenue growth decelerated from 16% to a still healthy 11% and the book to bill was only approximately 1.0."
- Many analysts are pleased with Cisco's deferred revenue growth - software/subscription growth helped the deferred revenue balance rise 8% Y/Y to $15.2B. On the other hand, the 3% Y/Y drop seen in Data Center (UCS server) sales has been an area of concern - on the earnings call (transcript), CEO Chuck Robbins blamed the decline on macro pressures and tough comps.
- Cisco's core switching business was also soft, declining 4% - the company blamed weak campus switch demand caused by macro issues. Routing revenue rose 5%, collaboration 3%, security 11%, and service provider video (boosted by Chinese demand) 37%. Wireless (Wi-Fi) was flat.
- Cisco's FQ2 results/FQ3 guidance, details and buyback/dividend hike
Thu, Feb. 11, 9:13 AM
- Gainers: DDD +15%. AG +14%. FSM +13%. TRIP +12%. MUX +11%. AUY +11%. SBGL +11%. GFI +10%. AGI +10%. LC +10%. GG +10%. CDE +9%. EGO +9%. KGC +9%. HMY +9%. IAG +9%. EXPE +8%. ABX +8%. NEM +8%. SLW +8%. SSRI 8%. AU 7%. AEM 7%. HL 7%. NG 7%. CSCO 6%. SKX 5%.
- Losers: FLO -18%. INCY -15%. SFL -13%. MYL -13%. BTU -13%. ZNGA -13%. SNOW -11%. IFF -10%. ELMD -9%. AVP -8%. CS -7%. BCS -7%. SUNE -6%. CIG -5%. TWTR -6%.
Wed, Feb. 10, 4:25 PM
- Cisco (NASDAQ:CSCO) has used its FQ2 report to announce it's adding $15B to its buyback program, raising its available funds to $16.9B. That's good for repurchasing over 13% of shares at current levels.
- The company has also hiked its quarterly dividend by $0.05/share (24%) to $0.26/share. That's good for a 4.6% forward yield. The next dividend is payable on April 27 to shareholders on record as of the April 6 close.
- Product revenue rose 2% Y/Y in FQ2 to $9B, and services revenue 3% to $2.9B. Excluding the set-top business, Americas and EMEA revenue rose 1%, and Asia-Pac (under pressure in past quarters due to Chinese weakness) rose 11%.
- Lifting EPS: GAAP operating expenses fell 7% Y/Y to $4.1B. $1.3B was spent on buybacks in FQ2. Cisco ended FQ2 with $60.4B in cash (just $3.9B in the U.S.) and $24.6B in debt.
- Cisco has jumped to $24.46 after hours.
- Cisco's earnings/guidance, earnings release
- Update (6:31PM ET): Cisco stated on its earnings call product orders rose 2% Y/Y in FQ2, a slight slowdown from FQ1's 3%. Enterprise orders -2%, Commercial (SMBs) +4%, Service Provider +5%, Public Sector flat. Asia-Pac orders rose 17%, while Americas orders were flat and EMEA down 1%. Cisco is now up 7.3% after hours.
Wed, Feb. 3, 11:58 AM
- An ITC administrative law judge (ALJ) has ruled (.pdf) Arista (NYSE:ANET) infringes claims within Cisco's (NASDAQ:CSCO) '537, '592, and '145 patents. No violation has been found for asserted claims in Cisco's '597 and '164 patents. The case will now go before the ITC commission.
- Though Cisco is taking a victory lap and declaring the infringed IP "[goes] to the core of Arista's products," analysts aren't worried about the ruling's impact on Arista. Gabelli's Hendi Susanto: "Arista intends to fully address the infringement allegations with a new release of EOS (operating software platform) available for software download in Q2 2016 ... We believe Arista Networks has been working on all potential workaround for all patents in its legal battle against Cisco."
- Stifel's Sanjiv Wadhwani: "Conversations with customers indicate that customers are fine with the result, and do not see it as a material impact." He adds the ALJ will approve or deny Arista's workaround for two of the patents the company was found to infringe in the next 30 days, and that the other patent only covers how external agents interact with Cisco's system database (SysDB), and not a SysDB itself.
- Last week, Arista countersued Cisco, accusing the networking giant of violating antitrust law by engaging in bait-and-switch tactics regarding industry adoption of its CLI commands. An ALJ ruling on a separate Cisco ITC suit against Arista is expected on April 26.
- Arista, hammered more than once since Dec. 2014 on Cisco lawsuit concerns, is rallying on a bad day for tech stocks. Q4 results arrive on Feb. 18.
Mon, Jan. 25, 5:41 PM
Wed, Jan. 20, 11:47 AM
- Tech large-caps aren't being spared as the Nasdaq drops 2.6%, and the S&P 2.7%, in the market's latest plunge. A slew of companies with $10B+ market caps are seeing declines that on many recent days were largely reserved for smaller ex-momentum plays.
- The casualty list includes Alibaba (BABA -5.3%), and that of course means Yahoo (YHOO -6%) is along for the ride. Top Alibaba rival JD.com (JD -6.2%) is also down strongly; Chinese macro fears continue to run high.
- Facebook (FB -4.9%), which (unlike most peers) remains well above where it traded 12 months ago, has fallen towards $90. Q4 results arrive on Jan. 27.
- Cisco (CSCO -5.2%) has fallen below $23. Possibly weighing: Piper's Troy Jensen has reported weak Q4 networking reseller survey results, and predicts Cisco will issue light FQ3 (April quarter) guidance next month with its FQ2 report. His FQ3 sales estimate has been cut by $400M to $11.9B (below a $12.07B consensus).
- DRAM/NAND flash maker Micron (MU -10.3%) is among the biggest decliners, with shares falling into the single digits. Micron now trades for 6.6x an FY17 (ends Aug. '17) EPS consensus of $1.48. Online payments leader PayPal (PYPL -4.4%) is having a rough day as well.
- IBM (IBM -4.7%), meanwhile, has made new multi-year lows after providing soft 2016 EPS guidance to go with a slight Q4 beat. Netflix (NFLX -6%) has sold off in spite of reporting strong Q4 subscriber adds.
Dec. 2, 2015, 12:52 PM
- Nimble Storage (NYSE:NMBL) has unveiled new hardware/software reference designs (referred to as Cisco Validated Designs) that pair Nimble's flash/disk arrays with Cisco's (NASDAQ:CSCO) UCS servers, data center switches, and ONE management software. The company has also introduced a reference architecture for using its arrays and Cisco gear with Microsoft's SQL Server 2014 database.
- Nimble states its SmartStack offerings (they make use of Cisco hardware) have been deployed by 750+ enterprises to date. The solutions have been aimed at mid-sized firms, along with larger enterprises with departmental or distributed environments. Future designs "will target a range of large-scale enterprise use cases such as virtual infrastructure, virtual desktop infrastructure, databases, and other mission-critical deployments that use the entire family of products, including the Nimble CS700 [Fibre Channel] array."
- Shares remain down 46% from where they traded before Nimble missed FQ3 estimates and issued soft guidance on Nov. 19.
Nov. 13, 2015, 3:49 PM
- A Swedish media report stating Cisco (CSCO -6%) is looking to buy mobile infrastructure/services giant Ericsson (ERIC - unchanged) led the latter's shares to briefly rise as much as 9.6% before giving back their gains. Markets are evidently skeptical.
- Worth noting: Cisco CEO Chuck Robbins just stated his company isn't looking to make large acquisitions. and is instead focusing on "small strategic" deals. Ericsson is currently worth $31B.
- Cisco and Ericsson are four days removed from announcing a comprehensive technology/reseller partnership. Ericsson will offer Cisco's switches/routers to mobile carriers in tandem with its own mobile infrastructure hardware and network services, Cisco will pair Ericsson's OSS/BSS network management software with its offerings, and the companies will form a "joint initiative focused on SDN/NFV and network management and control."
- Update: Cisco tells CNBC reports it's looking to buy Ericsson are "not true."
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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