Not gonna get routed.
Shares of Cisco traded higher after the company posted a better-than-expected Q1, and guided Q2 earnings above consensus. CEO John Chambers said that large customers and governments had larger-than-expected budgets, helping the top line, but noted that global economic uncertainty continues to be in issue, making it difficult to predict market conditions. “There will always be challenges," Chambers said. "We are watching very closely the developments in Europe and the global economy, public sector spending, India business, and the fallout from the flooding in Thailand.”
The company reported Q1 earnings of $0.43 per share on revenue of $11.3 billion while analysts had forecast $0.39 on $11.03 billion. In Q2, the company said it expects sales to increase by 7-8%, translating to revenue of $11.13-11.12 billion, the mid-point topping consensus of $11.14 billion. Management guided earnings to a range $0.42-0.44 in the quarter, topping the average analyst estimate of $0.42.
Commenting on the Q1 results, one Wall Street analyst said, “Typically 5% revenue growth would be disappointing, but considering Cisco is in the process of turning around its business, this is solid.”
Chambers said the company is “off to a very good start” for the year, and the company will continue to increase its focus on Cisco’s core business of products that move data across the Internet and corporate networks.
Cisco Systems (CSCO : NASDAQ : US$18.61), Net Change: 1.00, % Change: 5.68%, Volume: 147,191,157
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