CISCO beats the street
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CISCO beats the street
Cisco beats the Street
World's largest maker of Internet gear reports results that come in slightly better than expected.
May 11, 2004: 4:35 PM EDT
NEW YORK (CNN/Money) - Cisco Systems, the largest maker of equipment used to connect computers and servers to the Internet, Tuesday reported better-than-expected sales and profits for the latest quarter, a sign that the corporate pickup in technology spending is continuing.
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The San Jose, Calif.-based company posted net income of $1.2 billion, or 17 cents a share, for its fiscal third quarter, up 21.6 percent from $987 million, or 14 cents a share, a year earlier.
Excluding stock-based compensation expenses and other charges, Cisco's pro forma earnings were $1.4 billion, or 19 cents a share, a penny ahead of analysts' expectations of 18 cents a share, according to earnings tracker First Call.
Sales jumped 21.7 percent to $5.62 billion, coming in a shade better than the consensus estimate of $5.55 billion.
Shares of Cisco (CSCO: Research, Estimates) gained 63 cents, or 2.9 percent, to $22.25 in regular trading on the Nasdaq Tuesday. The stock has fallen nearly 10 percent so far this year, however, after soaring 85 percent in 2003.
The stock dipped slightly after-hours as investors awaited news of the company's sales guidance for the fiscal fourth quarter. Analysts are predicting sales of $5.76 billion. Cisco does not typically comment on earnings targets. The First Call consensus for pro forma earnings is 19 cents per share.
In addition, Erik Suppiger, an analyst with Pacific Growth Equities, said that one small red flag he noticed was a sequential rise in inventories in the quarter. Cisco's inventories were $1.12 billion, a more than 20 percent increase from the second quarter.
Rising inventories at Intel in the first quarter have spooked some investors, who are concerned about what may happen if sales growth is not robust enough going forward to justify the inventory buildup.
But Drake Johnstone, an analyst with Davenport & Co. said it was encouraging to note that Cisco's widely watched gross margins figure, a measure of how profitable the company is after subtracting the cost of sales, were 68.8 percent, up from 68.5 percent in Cisco's fiscal second quarter.
Johnstone said he was expecting Cisco's gross margins to drop to about 68 percent, based on similar declines reported by Cisco's competitors.
World's largest maker of Internet gear reports results that come in slightly better than expected.
May 11, 2004: 4:35 PM EDT
NEW YORK (CNN/Money) - Cisco Systems, the largest maker of equipment used to connect computers and servers to the Internet, Tuesday reported better-than-expected sales and profits for the latest quarter, a sign that the corporate pickup in technology spending is continuing.
YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.
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The San Jose, Calif.-based company posted net income of $1.2 billion, or 17 cents a share, for its fiscal third quarter, up 21.6 percent from $987 million, or 14 cents a share, a year earlier.
Excluding stock-based compensation expenses and other charges, Cisco's pro forma earnings were $1.4 billion, or 19 cents a share, a penny ahead of analysts' expectations of 18 cents a share, according to earnings tracker First Call.
Sales jumped 21.7 percent to $5.62 billion, coming in a shade better than the consensus estimate of $5.55 billion.
Shares of Cisco (CSCO: Research, Estimates) gained 63 cents, or 2.9 percent, to $22.25 in regular trading on the Nasdaq Tuesday. The stock has fallen nearly 10 percent so far this year, however, after soaring 85 percent in 2003.
The stock dipped slightly after-hours as investors awaited news of the company's sales guidance for the fiscal fourth quarter. Analysts are predicting sales of $5.76 billion. Cisco does not typically comment on earnings targets. The First Call consensus for pro forma earnings is 19 cents per share.
In addition, Erik Suppiger, an analyst with Pacific Growth Equities, said that one small red flag he noticed was a sequential rise in inventories in the quarter. Cisco's inventories were $1.12 billion, a more than 20 percent increase from the second quarter.
Rising inventories at Intel in the first quarter have spooked some investors, who are concerned about what may happen if sales growth is not robust enough going forward to justify the inventory buildup.
But Drake Johnstone, an analyst with Davenport & Co. said it was encouraging to note that Cisco's widely watched gross margins figure, a measure of how profitable the company is after subtracting the cost of sales, were 68.8 percent, up from 68.5 percent in Cisco's fiscal second quarter.
Johnstone said he was expecting Cisco's gross margins to drop to about 68 percent, based on similar declines reported by Cisco's competitors.
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