Cisco sees slower growth in second quarter
REUTERS - Cisco Systems Inc (CSCO.O) reported first quarter results that beat estimates but expects flat earnings and slower revenue growth for the current quarter.
"We are modeling Europe to get worse before it gets better," Chief Executive John Chambers said on Tuesday, echoing his comments from the company's fourth-quarter earnings call in August.
However, he added that "we see signs of improvement in the U.S. in enterprise, service provider and commercial."
Still, Chamber said, it was too early to speak of a trend "though we are continuing to see what we like."
Cisco said it expects earnings per share, excluding items, of 47 cents to 48 cents in its fiscal second quarter, which runs until the end of January. A year earlier it reported EPS of 47 cents.
It also said it sees revenue growth in a range of 3.5 percent to 5.5 percent, compared with 11.6 percent growth in the second quarter of 2012.
Chambers said he would give a long-term outlook at the company's financial analyst day next month.
Analysts had been expecting a cautious outlook.
"Considering the sluggish macro environment it's good that they are expecting growth at all," said ZK Research analyst Zeus Kerravala.
He added that Cisco has been "pretty accurate" at predicting economic conditions.
In its first quarter, which ran until the end of October, Cisco surprised analysts with a solid beat, due to cost cuts and the company's broad product range.
First-quarter net income, excluding items, rose 10.6 percent to $2.6 billion, or 48 cents per share, compared with analysts' average estimate of 46 cents a share as compiled by Thomson Reuters I/B/E/S.
Revenue rose 6 percent from the year-ago quarter to $11.9 billion, compared with a Street view of $11.77 billion.
Cisco's shares rose 6.7 percent to $17.98 in after-hours trading.
Analysts applauded the company's cost discipline and welcomed solid results in a tough environment.
"Given concern about enterprise spending, the company seems to be bucking the trends," said Bill Kreher, senior technology analyst at Edward Jones.
"The bar was low but the company did exceed those expectations. The company appears to be using strong cost discipline in meeting their numbers."
Mizuho Securities analyst Joanna Makris said "at first blush these are good numbers in a bad macro (environment)."
"It's largely due to a product mix - a larger shift to routing - and cost cutting," adding that "this is better than expected. We have been thinking they would squeak by on the top line." (Reporting by Nicola Leske; additional reporting by Liana Baker and Jennifer Saba; Editing by Phil Berlowitz)
- Tweet this
- Share this
- Digg this
- China's Xiaomi hopes Mi 4 smartphone can take on Apple
- Jet Airways chairman says looking to restructure debts, talking to bankers
- Nifty hits record high on foreign buying, higher Asian stocks
- Rebels likely downed Malaysian jet 'by mistake' - U.S. officials
- U.N.'s Pillay says Israel may be committing war crimes
The Nifty rose to a record high on Wednesday, led by gains in blue-chips such as ICICI Bank on continued foreign-investor buying, while higher Asian shares also helped sentiment. Full Article
Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs Full Article
Jet Airways chairman says looking to restructure debts, talking to bankers Full Article
Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec Full Article
Supreme Court could allow Sahara boss to conduct asset sale talks, company says. Full Article
Five held in China food scandal probe, including head of Shanghai Husi Food Full Article