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Cisco Systems, Inc. (CSCO)

  • Dec. 20, 2012, 12:40 AM
    Arris (ARRS) finished AH trading up 16.9%, and Google (GOOG) down 0.4%, following the Motorola Home deal. In a call discussing the deal, Arris claimed Google has agreed to cap Arris' liability in TiVo's patent suit against Motorola to "a very small number." Many think the total liability could be enormous (I, II). Long-term, Arris/Motorola should be a formidable rival to Cisco's (CSCO) Scientific Atlanta, but there's some potential for near-term share loss as integration issues are dealt with and customers try to re-diversify their sources.
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  • Dec. 19, 2012, 6:28 PM
    Google (GOOG) is selling Motorola Home for $2.35B ($2.05B in cash + $300M in stock) to Arris (ARRS). The division, which sells set-top boxes, infrastructure gear, and other hardware to pay-TV and broadband providers, had revenue of $3.4B in the 4 quarters ending Sep. 30. Arris, which closed with a market cap of just $1.65B, is halted. The deal will be "significantly accretive" to Arris' EPS and give Google a 15.7% stake in the company, which will probably have to raise a lot of debt to finance the purchase. (previous)
  • Dec. 18, 2012, 11:32 AM
    Cisco (CSCO +0.4%) is betting big on network management software: fresh off acquiring Cariden (I, II), the company says it's buying BroadHop, a provider of policy control software for carriers. While Cariden focuses on managing infrastructures and optimizing capacity, BroadHop's software helps manage end-user mobile/wireline services. Both purchases support Cisco's ONE platform for remotely programming its hardware. Earlier this year, Cisco bought ClearAccess, a developer of modem/set-top provisioning software. (Meraki) (Truviso)
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  • Dec. 18, 2012, 9:40 AM
    H-P (HPQ -0.6%) opens lower after Topeka's Brian White, best known for praising all things Apple, downgrades shares to Sell in response to their rally. H-P's product line issues, a weak IT spending environment, and Cisco and EMC's ambitions to become broader IT solutions providers are named as concerns. White also notes H-P's European exposure (EMEA was 36% of FQ4 sales), and says his firm believes "IT spending in the region has deteriorated further over the past few weeks." (yesterday)
  • Dec. 16, 2012, 7:59 PM
    Cisco (CSCO) is looking for a buyer for its Linksys unit, Bloomberg reports. Sources think the low-margin business, which sells home Wi-Fi routers/adapters and Ethernet switches, could draw interest from TV makers, but expect it to sell for much less than the $500M Cisco paid for Linksys back in '03. The news comes as Cisco tries to increase its reliance on high-margin software/services sales. NetGear (NTGR) could benefit from any turmoil/uncertainty caused by sale efforts.
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  • Dec. 15, 2012, 8:42 AM
    Some of GigaOm's 2013 cloud services predictions: 1) Providers will work harder to prove their platforms are safe/reliable enough for enterprises. Amazon, Microsoft, and others already see this as a priority. 2) H-P will face a "make-or-break" year for its newly-launched cloud offerings, and the OpenStack infrastructure platform (supported by Rackspace, H-P, Dell, and others) will also have to prove itself. 3) Software-defined networking will only make modest progress, in spite of all the hype.
  • Dec. 14, 2012, 12:40 PM
    Juniper (JNPR +2.9%) has rallied two days in a row since announcing its $176M purchase of software-defined networking (SDN) startup Contrail Systems (I, II). Light Reading thinks Contrail could be working on a genuine open standards-based SDN controller, something very different from the semi-proprietary solutions of Cisco and VMWare/Nicira. Stifel notes Cisco's (CSCO) plans for its OPEN SDN architecture involve selling proprietary software for its switches - thus, SDN appears a means to its goal of doubling software sales over the next 5 years.
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  • Dec. 12, 2012, 7:17 PM
    Juniper (JNPR) acquisition target Contrail Systems has test customers for a network virtualization solution that can manage existing Cisco and Juniper gear, notes GigaOm. The idea is to deliver a software-defined networking solution that won't require big changes to existing enterprise networks, while still providing the technology's hardware management and programmability benefits. Cisco (CSCO) acquisition target Cariden is looking to do something similar, but for carrier networks.
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  • Dec. 12, 2012, 6:25 PM
    BofA Merrill Lynch's 1,600 year-end target for the S&P in 2013 is one of the most optimistic on Wall Street. Its 10 favorite stocks for the new year: F, WMT, VLO, C, LLY, MMM, CSCO, MOS, CTL and NU. It's worth noting that BAML's list from last year has returned 18% YTD so far.
  • Dec. 12, 2012, 4:33 PM
    Like many of its peers, Juniper (JNPR) is betting big on software-defined networking (SDN): the company is issuing 5.82M shares and $57.5M in cash to buy the shares of SDN startup Contrail Systems it doesn't already own; the total valuation is $176M. Contrail, which recently snagged the CTO of Juniper's JUNOS OS, has been in stealth mode, though its blog posts suggest it might be working on an SDN software controller that will compete with VMware's (VMW) Nicira unit, seen as a threat to Cisco and Juniper's hardware margins.
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  • Dec. 12, 2012, 2:47 PM
    Apple, Qualcomm, Cisco, Allot, F5, Skyworks, and Avago are among the names Merrill expects to benefit as adoption of 4G services (much lower internationally than in the U.S.) takes off. Qualcomm benefits from higher device royalties and sales of relatively costly 4G baseband chips; Cisco from demand for its ASR9000 edge routers to aggregate 4G data traffic; and F5 from demand for networking gear that can "understand traffic details at a very granular level." Skyworks and Avago are seen having stronger 4G positions than rivals TriQuint and RF Micro.
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  • Dec. 12, 2012, 1:21 PM
    Hungry to grow its networking business (one of its few bright spots) at Cisco's expense, H-P (HPQ) has taken the risk of launching a pay-as-you-go option for enterprises. H-P will provide networking gear to service providers at no up-front cost; the SPs will then strike managed services deals with enterprises; and H-P will get paid based on the number of ports activated. Swisscom has signed up to offer the service, which is similar to a subscription service offered by Brocade (BRCD).
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  • Dec. 10, 2012, 2:04 PM
    Cisco (CSCO +2.6%) is rallying as analysts give a thumbs-up to its analyst day. Goldman is pleased with Cisco's 3-5-year opex guidance, and argues software-defined networking is "an incremental software revenue opportunity rather than a threat," though others feel differently. Raymond James expects services growth to prop up Cisco's margins, and thinks its routing margin pressures (stemming partly from carrier adoption of router bypass tech) indicate "an under-appreciated headwind" for rival Juniper (JNPR).
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  • Dec. 10, 2012, 2:08 AM
    Cable infrastructure vendor Arris (ARRS) and U.K. set-top box maker Pace have "made the most compelling bids" for Motorola Mobility's (GOOG) set-top/cable infra unit, Bloomberg reports. A complex financing structure in which Google maintains equity and patents might prevent a deal from closing this year. P-E firms are said to be uninterested in the unit, which has to contend with an industry shift towards cloud-based apps, and potentially costly litigation with TiVo. Cisco's (CSCO) cable unit could benefit from any turmoil related to the sale. (previous)
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  • 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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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.