Thu, Mar. 26, 2:05 PM
- MKM's Michael Genovese is pleased with Infinera's (NASDAQ:INFN) recent unveiling of two new photonic integrated circuits (PICs) that will go into optical transport systems aimed at 100G metro networks. "PICs are the source of the company's competitive advantage in long haul, and we expect the new more flexible and granular PICs to form the basis of a compelling Metro 100G aggregation/Telecom product later this year."
- Infinera asserts its new PICs offer more flexibility by allowing capacity to be "divided at a granular optical level with each slice capable of being routed in a different direction as it exits the line card or the system housing it." One PIC (the ePIC-500) delivers 500Gbps of capacity at network hub locations, and the other (the oPIC-100) 100Gbps at network spoke locations.
- Infinera claims tests showed "an estimated average reduction of 28 percent in modules, 31 percent in power and 45 percent in bandwidth inefficiencies as compared to conventional, commercial off the shelf technologies that deliver single-wavelength or super-channel solutions for 100G, 200G or 400G."
- Genovese sees Infinera's addressable market expanding to ~$20B in 2018 from ~$5B in 2014 as it "competes in end-to-end Optical Transport including Metro and [data center infrastructure]," and as its systems handle traffic forwarding features traditionally handled by routers - the latter could pose challenges for Cisco (NASDAQ:CSCO) and Juniper (NYSE:JNPR).
- Infinera is once more within a dollar of a 52-week high of $19.48.
Tue, Mar. 24, 11:29 AM
- Like others, Stifel reports Ciena (NYSE:CIEN) and Cisco (NASDAQ:CSCO) are expected to share a huge Verizon 100G metro optical contract. However, while others have reported Cisco will get ~2/3 of the contract, Stifel's checks indicate the Cisco/Ciena split hasn't been determined; the firm believes "both vendors will start on an equal footing," and that Ciena might even get a majority of the deal.
- Ciena is expected to supply a platform that's similar to its 6500 series packet-optical (integrated Ethernet switching/optical networking) hardware, and which supports OTN switching. Stifel thinks Ciena, whose 6500 series is already used in Verizon's 100G long-haul network, could get over $100M in 2016 revenue from the metro deal. Cowen has estimated the total contract opportunity could be worth $200M-$300M over two years.
- Optical component vendor NeoPhotonics (NPTN +4%), which received 15% of its 2014 revenue from Ciena (trailing only Huawei's 38%) and has healthy 100G exposure, is also rallying. Its shares are now up 104% since a Q4 beat was posted on March 3.
- Update: Verizon has confirmed Ciena and Cisco have won the deal. No word on the split between the companies.
Thu, Mar. 5, 11:31 AM
- Zix (ZIXI +7.2%) and Cisco (CSCO - unchanged) have struck an OEM deal regarding the integration of Zix's e-mail encryption tech with a new version of Cisco's IronPort Encryption Appliance (IEA), and the inclusion of Cisco's Post X Envelope e-mail delivery method with the ZixGateway e-mail encryption appliance.
- The IEA refresh will become available in May, and the revamped ZixGateway solution in Q4. The former will include new hardware and software patches to go with Zix's technology.
- Zix has surged to new 2015 highs following the announcement. The 52-week high is $4.69.
Mon, Mar. 2, 4:12 PM
- Cisco (NASDAQ:CSCO) rose 2.2% today, and in doing so rallied above $30 for the first time since 2007. Shares are up 12% since the networking giant beat FQ2 estimates and reported 5% Y/Y product order growth on Feb. 11.
- Like telecom equipment peers, Cisco has made a flurry of announcements at the Mobile World Congress. Drawing attention: The launch of the USC 8000 small cell 4G/Wi-Fi base station line for enterprises and public venues. Vodafone is deploying the solution, which includes both access points and controllers and aims to address growing carrier interest in deploying small cells in high-traffic locales.
- Cisco has also announced: 1) Mobility IQ, a SaaS/cloud-based analytics software solution for mobile carriers that contains network monitoring, advertising, and service management tools; IBM has also shown an interest in this space. 2) A deal with AT&T through which Ma Bell will rely on Cisco's products to deliver connected car services.
Wed, Feb. 25, 3:16 PM
- Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
- Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
- HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
Thu, Feb. 12, 2:00 PM
- At least six firms have upped their Cisco (CSCO +8.7%) targets in response to the company's FQ2 beat, in-line guidance, and healthy product orders. Shares are at their highest levels since 2007.
- "We came away from the call with greater confidence in Cisco's technology leadership, execution and recovery trajectory," writes Oppenheimer (Buy). "While the headwinds in emerging markets and service provider are likely to remain in place, we believe that by now they are well reflected in estimates."
- William Blair (Outperform): "While Cisco clearly benefited from easy comparisons across its business and several major product cycles, we nonetheless walked away with increased confidence in the company's business momentum, growth prospects and strategic positioning."
- Sterne Agee (Buy): "The biggest takeaway that should drive incremental support in the stock near term is the improving tone on emerging markets (India plus 11%, Mexico plus 21%) along with U.S. commercial strength up 12% against a relatively tough comp (total Americas up 7% along with EMEA up 7%)."
- Deutsche (Buy) believes Cisco businesses responsible for half of sales - data center switching, security, services, and Wi-Fi - can post growth "2x or higher" than GDP growth. Credit Suisse (Underperform) remains bearish on a belief SDN will begin having a bigger impact on Cisco's sales and margins over the next 12-18 months.
- John Chambers mentioned yesterday Cisco now has 300+ customers for its APIC SDN controller. The remarks come after VMware reported paid customer count for its rival NSX platform rose 60% Q/Q in Q4 to 400+. Facebook, meanwhile, has just revealed a new modular switch platform for its open-source Open Compute Project.
- Prior Cisco earnings coverage
Thu, Feb. 12, 11:03 AM
- Cisco (NASDAQ:CSCO) beat FQ2 estimates on the back of 8% Y/Y product growth (aided by favorable comps), offered in-line guidance (better than feared, given forex pressures), and reported a 5% increase in product orders. Enterprise, SMB, and public sector orders respectively rose 10%, 8%, and 7%, and service provider orders dropping 1% (compares with a 10% FQ1 service provider drop).
- Cisco still isn't modeling a rebound in service provider or emerging markets demand for several quarters, and forecasts global service provider capex will be down by a mid-single digit % in 2015. But it's more optimistic about enterprise, public sector, U.S., and EMEA demand.
- Telecom and networking equipment vendors, many of whom have been hit hard by capex pressures, are rallying following Cisco's numbers, as are a couple of component/chip suppliers. The Nasdaq is up 0.7%.
- Notable gainers include Alcatel-Lucent (ALU +4.7%), Aruba (ARUN +3.4%), Ruckus (RKUS +5.1%), Sonus (SONS +3.4%), Extreme Networks (EXTR +3.4%), Brocade (BRCD +1.9%), Adtran (ADTN +3%), Infoblox (BLOX +2.7%), Finisar (FNSR +2.1%), Cavium (CAVM +2%), Ixia (XXIA +1.9%), and Mavenir (MVNR +3.4%).
- Cisco's 18% Y/Y wireless product sales growth appears to be going over well with Aruba and Ruckus investors, and its 11% switching growth with Extreme and Brocade investors.
Thu, Feb. 12, 9:15 AM| 5 Comments
Wed, Feb. 11, 5:00 PM
- Cisco (NASDAQ:CSCO) guides on its FQ2 CC (webcast) for 3%-5% FQ3 revenue growth and EPS of $0.51-$0.53, in-line with a consensus of 4% growth and $0.52.
- John Chambers notes Cisco isn't modeling a rebound in emerging markets and service provider sales for several more quarters. As is the case for other enterprise tech giants, forex is acting as a headwind.
- Product orders rose 5% Y/Y in FQ2, an improvement from FQ1's 1%; book-to-bill was above 1. Americas orders +8% (U.S. +7%) and EMEA +7%, but Asia-Pac -6%, with a 19% Chinese decline more than offsetting 11% Indian growth.
- Enterprise orders +10%, with Cisco's 28 largest enterprise accounts growing over 30%. Commercial (SMBs) +8% and public sector +7%. Service provider orders fell 1%, but that's a big improvement from FQ1's 10% drop.
- Product segment performance: Switching revenue +11% to $3.62B (lifted by Nexus 3K/9K data center switch growth); routing +2% to $1.76B; collaboration +10% to $990M (improved from recent quarters); data center (UCS servers) +40% to $846M; service provider video -19% to $776M (set-top share loss); wireless +18% to $611M (Meraki sales doubled); security +6% to $416M.
- FQ2 results, dividend hike/details
Fri, Feb. 6, 5:27 PM
- Arista (NYSE:ANET) fell 6.3% in regular trading today, leaving shares at their lowest levels since June 10, just four days after the company's blockbuster IPO. The post-IPO low is $55.00.
- Today's decline came after MKM (launched coverage at Buy in October) cut its target by $25 to $80, albeit while keeping its bullish rating. Shares fell hard on Wednesday after a Citi downgrade.
- After the close, Arista announced its Q4 report will arrive on the afternoon of Thursday, Feb. 19. Consensus is for revenue of $166.6M (+45% Y/Y) and EPS of $0.38.
- Arista used the announcement to declare the ITC's decision to investigate Cisco's (NASDAQ:CSCO) infringement complaints against the company (filed shortly after Cisco sued Arista in early December) "lack merit," and that Cisco's "unorthodox methods of publicizing them suggest a deliberate effort by Cisco to use the courts to gain a marketing opportunity."
Tue, Jan. 27, 12:11 PM
- Cisco (CSCO -4.2%) is among the biggest large-cap tech decliners not named Microsoft after the software giant reported weaker-than-expected Windows and traditional Office license figures, and provided a conservative calendar Q1 outlook. 24.7M shares have already been traded; the 3-month daily average is 29.5M.
- The networking giant's FQ2 report arrives on Feb. 11. Piper hiked its target by $7 last week to $33, citing positive survey data.
Dec. 18, 2014, 2:04 PM
- With the help of stronger-than-expected hardware sales, Oracle (ORCL +9.2%) beat FQ2 estimates in spite of a 400 bps forex headwind (twice what was originally expected). FQ3 guidance was conservative after taking forex pressures into account.
- The numbers have been good enough for Oracle to surge to new highs and receive a slew of target hikes, and to lead many enterprise tech names to outperform amid a big market rally. The Nasdaq is up 1.9%.
- Microsoft (MSFT +3.2%), Cisco (CSCO +2.3%), EMC (EMC +3.7%), VMware (VMW +5.1%), and beaten-down IBM (IBM +2.8%) are among the enterprise tech names outperforming today. Others: SPLK +4.6%. CA +3.5%. RHT +3.4%. VRNS +6.3%. PCTY +5.8%. JIVE +4.6%. VMEM +5.2%. SAAS +4.7%. BRCD +3.8%.
- Oracle's healthy cloud software numbers are drawing attention: While traditional software license revenue fell 4% Y/Y, its SaaS/PaaS revenue rose 41%. SaaS/PaaS bookings totaled $170M, and are expected to be "well over" $1B in FY16 (ends May '16). Fusion cloud app bookings rose over 100%.
- On the CC (transcript), Oracle performed its customary trash-talking of cloud app rivals. "We are clearly growing faster than Salesforce (CRM +4%) and were more than three times the size of Workday (WDAY +3.2%)." Both firms are posting solid gains.
- Oracle's numbers come as Bloomberg reports the Chinese government is looking to "purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." IBM, Cisco, and other U.S. firms have already seen their Chinese sales fall sharply following last year's NSA spying uproar.
Nov. 13, 2014, 11:36 AM
- "In the context of the considerable headwinds Cisco (NASDAQ:CSCO) currently faces, the results this quarter were quite solid," writes BMO (Outperform) following Cisco's FQ1 report. With soft carrier (orders -10% Y/Y) and emerging markets (BRIC/Mexico orders -12%) demand already telegraphed by Cisco and peers, investors are giving the company a pass for its light FQ2 guidance.
- RBC (Outperform): "Strong GM improvements and the rebound in switching point to encouraging trends for Cisco, which is also squeezing out added workforce productivity." Atlantic Equities (Overweight): "At 11x PE 2015E and 8x EV/FCF, Cisco’s valuation appears undemanding among other large cap tech stocks, especially given its 7% earnings CAGR 2014-17E."
- Bears remain worried about sales growth and the long-term impact of SDN. Citi (Sell): "We continue to believe Cisco remains a flat to low-single-digit grower with little upside to op margin. We therefore believe the current 12x P/E more than compensates for the 3% dividend, yet slowing buyback.”
- JPMorgan (Underweight): "We continue to believe current switching industry ASPs and margins are unsustainable due to structural technology shifts." For its part, Cisco disclosed its ACI/APIC SDN/networking virtualization solution saw its paid customer count more than double in its first full quarter of shipments. VMware is seeing growing demand for its rival NSX platform.
- FQ1 product performance: Switching +3% Y/Y to $3.85B (strong data center switch sales); routing -4% to $1.95B (carrier weakness); collaboration -10% to $949M (telepresence weakness); service provider video -12% to $871M (set-top weakness); data center +15% to $693M (server share gains); wireless +11% to $605M (strong Meraki sales); security +25% to $455M (boosted by the SourceFire acquisition).
- Prior Cisco earnings coverage
Nov. 12, 2014, 4:50 PM
- Cisco (NASDAQ:CSCO) guides on its FQ1 CC (webcast) for 4%-7% Y/Y FQ2 revenue growth and EPS of $0.50-$0.52. That's below a consensus for 8.4% revenue growth and EPS of $0.53.
- John Chambers states the forecast reflects an "added measure of conservativeness" regarding weak U.S. carrier spending. Cisco traded lower on Monday after AT&T forecast its capex would fall by $3B in 2015.
- Cisco's total product orders rose 1% Y/Y in FQ1, even with FQ4's clip. Americas +2%, EMEA +6%, Asia-Pac/Japan -12%.
- U.S. orders rose 3% Y/Y thanks to public sector (+22%) and SMB (+7%) strength, but U.S. service provider orders fell 18%.
- CSCO -0.6% AH. FQ1 results, details.
Nov. 12, 2014, 4:18 PM
- Along with its FQ1 results, Cisco (NASDAQ:CSCO) announces CFO Frank Calderoni is leaving at the end of 2014. Business technology/operations finance SVP Kelly A. Kramer will replace him.
- FQ1 gross margin was 63.3%, +150 bps Q/Q and +30 bps Y/Y, and above guidance of 61%-62%.
- Product revenue rose fractionally Y/Y to $9.44B, after declining 2% in FQ4. Services revenue (driven by past sales, more stable) rose 5% to $2.8B, an even growth rate with FQ4.
- GAAP opex rose 1% Y/Y to $4.99B. $1B was spent on buybacks; $1.5B had been spent in FQ4.
- FQ1 results, PR
Nov. 10, 2014, 9:51 AM
- Declaring its Project VIP network expansion effort ahead of schedule, AT&T has set a 2015 capex budget of $18B, down from 2014's $21B and below a prior forecast of $20B. The figure is equal to only 13% of AT&T's 2015 revenue consensus.
- Telecom equipment and optical component makers, many of whom have already felt the effects of AT&T's subdued 2014 wireline capex, are off in early trading. CSCO -1.4%. ALU -4.8%. CIEN -6.6%. ADTN -7.8%. JNPR -2.5%. RKUS -2.1%. SONS -2.9%. FNSR -2.9%. JDSU -1.1%. RKUS -2.1%. XXIA -2%. FFIV -1.6%. ERIC -1.7%.
- Cisco delivers its FQ1 report on Wednesday. The networking giant reported an 11% Y/Y FQ4 drop in service provider orders, thanks to both weak demand and share loss.
CSCO vs. ETF Alternatives
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.
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