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Cisco Systems, Inc. (CSCO)

  • Dec. 7, 2012, 11:50 AM
    Cisco (CSCO -1.2%) mentions during its analyst day it expects long-term growth of 5%-7% - that modest target, the result of slow switch/router growth, explains Cisco's aggressive efforts to return cash. Total gross margin is seen holding steady, even though Cisco wants to double software sales over the next 5 years and forecasts a 9%-11% services CAGR. John Chambers says Cisco has gone too long without a major acquisition (NDS apparently doesn't count) - NetApp (NTAP) has been viewed as a possible target.
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  • Dec. 6, 2012, 1:58 PM
    Cisco (CSCO +1.3%) and Juniper (JNPR +3.9%) are higher, possibly aided by a Credit Suisse note downplaying the threat posed by software-defined networking (SDN) solutions, such as those offered by VMware's (VMW) Nicira.  CS notes most of the IT pros it spoke with at a conference were "simply trying to understand what is SDN," and argues Cisco has a "practical and flexible" SDN strategy (I, II, III). Others have suggested SDN fragmentation between controller standards pushed by Cisco, Nicira, and the OpenFlow camp are a problem. Cisco's analyst day is tomorrow.
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  • Dec. 4, 2012, 11:25 AM
    Some stats from Mary Meeker's 2012 Internet trends report: 1) China now has 538M Internet users (+10% Y/Y), though penetration is still only at 40%. It also has 270M smartphone subs; penetration (as a % of mobile subs) stands at 24%. 2) Globally, there are 1B smartphone subs, compared with 5B mobile subs. 3) Mobile data now makes up 13% of total Internet traffic. 3) Total mobile app/ad revenue is expected to hit $19B in 2013, up from $15B in 2012. 4) About 1.5B Wi-Fi devices and 2B Bluetooth devices will ship in 2012.
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  • Dec. 3, 2012, 6:55 PM
    The router and Ethernet switch markets, a.k.a. Cisco's (CSCO) meal ticket, respectively declined 0.2% and 4.4% in Q3, per IDC. Declining low-end switch sales more than offset a 10.7% Y/Y increase in 10-gig sales. Cisco's switch share fell 340 bps Y/Y to 62.2%, thanks to competition from H-P (9.3% share) and others.The lack of growth in the router and Ethernet switch markets, together with the leads held by F5, Riverbed, Fortinet, and others in faster-growing networking segments, is making it very tough for Cisco to return to double-digit growth. (Nomura)
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  • Dec. 1, 2012, 9:15 AM
    Some of Berenberg's 2013 tech predictions: 1) The R&D-intensive mobile chip market will see consolidation and possible exits, benefiting Qualcomm, Samsung, and MediaTek at the expense of rivals. 2) Samsung will rely on its own baseband chips, a negative for Qualcomm, Broadcom, and others. 3) Huawei will strike a reseller deal with IBM, which will threaten Cisco and Juniper's margins. 4) Apple will launch an iOS MacBook Air (questionable), a cheaper iPhone (less so), and the mythical Apple TV set. 5) Windows 8 and Windows Phone will disappoint.
  • Nov. 30, 2012, 12:40 PM
    Cisco's (CSCO) acquisition of Cariden has a software-defined networking component to it, notes Light Reading's Craig Matsumoto. Cariden's software can manage and analyze the behavior of carrier networking gear from multiple vendors, and Cisco has said the purchase will complement its ONE platform for remotely controlling and programming Cisco hardware. Cisco insists Cariden will still support rival hardware.
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  • Nov. 29, 2012, 8:55 AM
    Cisco (CSCO) is acquiring Cariden Technologies, a provider of network management software for carriers, for $141M in cash + retention incentives. Cisco touts the capacity planning/optimization abilities of Cariden's software, which manages both routers and optical networking gear, and says it will complement its nLight platform for jointly provisioning both types of hardware. Cariden competes with OPNET (OPNT), which is set to be acquired by Riverbed (RVBD). Cisco bought two other network management software firms earlier this year (I, II).
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  • Nov. 21, 2012, 12:39 PM
    Software-defined networking (SDN) may be a threat to Cisco and Juniper, but it's an opportunity for Broadcom (BRCM), since it could boost the usage of commodity switches running on Broadcom's network processors. The EE Times reports Broadcom  is working with app developers and two unnamed OEMs to create an API that would support both traditional networks and the popular OpenFlow SDN standard. During Broadcom's Q2 earnings call, CEO Scott McGregor claimed his company is "working with pretty much everybody in the SDN space."
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  • Nov. 19, 2012, 5:47 PM
    Cisco (CSCO) might try to parlay its acquisition of Meraki and its subscription/cloud-based management software into a broader effort to provide such software for its networking gear and servers, thinks Wunderlich. John Chambers mentioned during last week's earnings call that Cisco wants to grow its recurring revenue streams. Light Reading, meanwhile, thinks Meraki's tech could open the door to more flexible network architectures that don't require dedicated hardware controllers.
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  • Nov. 19, 2012, 8:14 AM
    Aruba Networks (ARUN) -4.7% in response to Cisco's (CSCO) purchase of enterprise Wi-Fi equipment/security appliance vendor Meraki. Cisco was already Aruba's top rival in enterprise Wi-Fi, and the addition of Meraki's solutions - differentiated by cloud-based management software that lowers admin costs and installation times - is bound to make life tougher, particularly in the SMB space. NetGear (NTGR) could also be affected. Cisco's wireless sales rose 38% Y/Y last quarter; Meraki has 20K customers and says it's on a $100M/year run rate. (Cisco/ThinkSmart)
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  • Nov. 18, 2012, 7:33 PM
    Cisco Systems (CSCO) says it intends to buy enterprise Wi-Fi equipment startup Meraki for $1.2B in cash and retention incentives, and to make it into its Cloud Networking Group. The deal's expected to close in Q2 of Cisco's fiscal 2013 (which ends in January).
  • Nov. 16, 2012, 2:16 PM
    Gartner forecasts global enterprise IT spending will rise 2.5% next year to $2.68T. Investors should be aware these estimates get revised frequently - 4 months after hiking its 2012 IT spending growth forecast to 3%, Gartner claims 2012 will only see "scant overall growth" due to macro issues that have clearly pressured (I, II) many enterprise IT names. Decent IT spending growth from financial services, telecom, and media companies is expected to offset continued government weakness.
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  • Nov. 15, 2012, 6:45 PM
    More from Dell's FQ3 call and slides: Large enterprises (-8% Y/Y, +5% for enterprise solutions) are said to be deferring discretionary IT purchases; that's backed up by October's earnings reports. Dell was a little more positive about SMBs (-1%, +15% for ES). Sales of DCS servers, used by Internet companies for "scale-out" deployments, rose 126% Y/Y. Networking +40%, boosted by Force10. More than one analyst suggested a big change is needed in PC strategy: cost cuts, price cuts (to maintain scale), and a retreat from the consumer market were among the suggestions.
  • Nov. 15, 2012, 5:46 PM
    Cisco Systems, Inc. (CSCO) declares $0.14/share quarterly dividend, in line with previous. Forward yield 3.13%. For shareholders of record Nov. 29. Payable Dec. 19. Ex-div Nov. 27. (PR)
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  • Nov. 15, 2012, 9:13 AM
    Cisco (CSCO) is spending $125M to buy Cloupia, a developer of software that automates the installation/configuration of data center hardware. Cloupia's software complements Cisco's Nexus data center switches and (especially) its fast-growing UCS server line. Compared with server market leaders IBM, H-P, and (Quest Software buyer) Dell, systems management software had been something of a weak spot for Cisco. (PR)
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  • Nov. 14, 2012, 10:36 AM
    Pac Crest's Brent Bracelin has upgraded Cisco (CSCO +6.4%) to Buy in response to its solid FQ1 results and FQ2 guidance. Cisco "could grow in 2013 and have stable to improving gross margin for the first time in two years," thinks Bracelin. Piper likes Cisco's sales execution and cost controls, and FBN notes shares trade at 5x EPS exc. cash. Europe is still a concern for many. FFIV +4%. JDSU +2.7%. XLNX +2.8%. BRCM +1.8%. CAVM +6.9%. FTNT +3.3%. ARUN +4.6%.  (CC comments: I, II) (transcript)
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Company Description
Cisco Systems Inc is engaged in designing, manufacturing and selling of Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry.