Cisco Reports Earnings Tomorrow

Cisco Reports Earnings Tomorrow

Cisco Systems will be one of the first technology companies to report earnings, including the results of April, the first month to bear the economic slowdown of the Covd-19 economic slowdown.

Cisco Inc. will announce figures on Wednesday after the market closes. At 16:30, I had a conference call on earnings. Eastern time.

In February, when the technology industry saw the virus epidemic mostly as an Asian supply chain issue and a Chinese demand problem, Cisco's projected revenue would decrease by 1.5% to 3.5% in the third quarter of the fiscal year ending annually in April. This means a range of $ 12.5 billion to $ 12.8 billion, with a profit of 79 cents to 81 cents per share.

But nobody on the street believes that original guidance can be achieved. The current street reconciliation for the quarter is asking network and software companies to earn $ 11.88 billion in revenue and 71 cents per share. In the current quarter that ended in July, the street expects $ 12.07 billion and 71 cents per share.

The primary tension in the quarter will be the balance of increasing demand for home networks and the softness of cloud spending equipment in company spending.

RBC Capital analyst Robert Muller writes in a research note that a Cisco quarter could be a mixed bag. "We find consensus expectations reasonable, but a wide variety of results [and] are possible given the uncertainties surrounding Covid-19."

Muller said he expects short-term sales in the company network to drop on campus: "We believe that total uncertainty will cause companies to be cautious about spending plans." But Cisco's "attention also suggests that it can benefit (relatively) if it directs customers to tried and tested Cisco offers that can offer a range of network solutions. Muller maintains its Outperform score and $ 47 target price.

On Monday, Amit Daryaniani, an analyst at Evercore ISI, holds an Outperform rating and $ 50, but competitors are lowering their estimates based on the latest cautious comments from Juniper (JNPR) and Arista Networks (ANET) competitors and the extra softness in corporate spending. "Despite recent challenges, we believe there are headwinds caused by the transition to remote work, such as increased network spending to expand capacity and increased demand for security and collaboration solutions." “We are still positive about Cisco because we believe the company can move forward in the current downturn.”

Similarly, Barclays analyst Tim Long is overweight at $ 48 in Cisco and remains targeted, but stated that his estimates for the current quarter are well below a consensus of $ 11.4 billion and 63 cents per share. "Our recent forecast reviews were largely due to the increasing disruption of Covid-19's corporate activity," Long said. “However, we see some drivers that can partially offset the negative winds of Covid-19. These include new management reviews that supply physical devices to the home business environment (WFH) and show that companies, including Barclays, are investing. Upgrade the Cisco facility to facilitate extended connectivity requirements and pre-existing product update courses ... should support Cisco in the long term and compensate for macro prints in the near term."

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