Posts for Ticker ‘Cisco’

A Cisco Debt Offering? (CSCO)

cisco-logoCisco Systems, Inc. (NASDAQ: CSCO) made an SEC Filing this morning which may leave many scratching their heads.  The company filed a prospectus for a sale of debt securities.
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Posted on: February 9, 2009 – 10:44 am in Bonds, Secondary Offering, Technology, Technology Companies, , , ,

Chambers’ Conference Call Commentary… Cisco Guidance Soft (CSCO)

Cisco Systems, Inc. (NASDAQ: CSCO) did give guidance in the conference call, and the shares got whacked over a less confident in near-term visibility and a weak January that is expected to last for several months. 

Below are some of the guts of Chambers’ paraphrased comments:
"Despite macroeconomic changes, we remain comfortable with long-term growth projections…. Long term 12-17% yr/yr, but at risk of stating the obvious there may be times that the growth will be above and below…… US is experiencing challenges… we are seeing US and EU customers remaining cautious….. product order growth was in low-teens…. orders were strong in December but January growth was lower than expected and was challenging… because of environment forecasting next quarter is EXTREMELY challenging…. due to caution from peers and customers and the company assumes that January’s growth rates may continue over next several months…. Shares now DOWN 5% at $21.89…. We believe strategy is right on target…. our best estimate is that this is a relatively short term challenge….  Q3 2008 REVENUE GUIDANCE is 10% year over year growth, (or otherwise 10% higher than $8.866 Billion to generate a guidance of $9.75 Billion)….. Unfortunately that is well under the $10.2 Billion FIRST CALL estimate……." -end of Chambers-

ON LAST LOOK CISCO SYSTEMS STOCK WAS DOWN SOME 7.6% to $21.31 at 4:56 PM EST.  That will mnark a new 52-week low if the stock is static in the morning.  The 52-week trading range is $22.30 to $34.24.

247WALLST.COM EARNINGS RELEASE:
Cisco Systems, Inc. (NASDAQ: CSCO) $0.38 non-GAAP EPS on revenues of $9.83 Billion.  First Call had estimates of $0.38 EPS and $9.79 billion in revenues. Net earnings after charges were $0.33.    Chambers noted: "As we enter the second half of the fiscal year, our innovation pipeline is in excellent shape, our balanced product momentum across core and advanced technologies continues to be solid, and execution against our long-term strategy remains unwavering. This constant evolution of moving into new markets and product adjacencies, alongside our core operational and financial strength, is the hallmark of Cisco’s ability to act upon key market transitions."

Jon C. Ogg
February 6, 2008

Posted on: February 6, 2008 – 5:06 pm in Earnings, Technology Companies, , ,

Cisco Buys Into Wireless Spectrum Analysis (CSCO)

Cisco Systems (NASDAQ:CSCO) has announced a definitive agreement to acquire Germantown, MD-based Cognio, Inc., a company involved in wireless spectrum analysis and management for wireless networks. 

Cognio’s spectrum technology enhances performance, reliability and security of wireless networks by detecting, classifying, locating and mitigating sources of radio frequency interference. The acquisition is said to provide Cisco with complementary and differentiating technology, intellectual property and a core team to expand Cisco’s leadership in unified wireless networking.

The Cognio acquisition is expected to close in the first quarter of Cisco’s 2008 fiscal year, and this looks to be the company’s 122nd acquisition. Upon the close of the acquisition, Cisco plans to integrate Cognio into its Wireless Networking Business Unit, under the Ethernet and Wireless Technology Group.

Financial terms were not disclosed as far as what Cisco is paying, nor ant financial backgrounder on Cognio.  Cognio was venture-backed with Northbridge Venture partners, ABS Ventures, and Avansis Venture listed as backers.

Jon C. Ogg
September 18, 2007

Posted on: September 18, 2007 – 7:42 am in Mergers and Buy Outs, Technology Companies, Wireless, , , ,

Cisco Clarifies Its Palm Relationship (CSCO, PALM, RIMM)

In corporate America there are many developments and deployments that never make it public because they are minor events to the company that day.  But sometimes even a slight change in technology use or adoption in one company can have ripple effects that play out against another company or an entire sector over time.  Last week we ran a piece titled “Palm’s True Loss: Cisco as a Client” that discussed Cisco Systems’ (NASDAQ:CSCO) changing from Palm Treo smartphone devices.  The good news for Palm (NASDAQ:PALM) is that Cisco Systems is not dumping the Palm Treo smartphone, or at least not entirely. 

What is happening is that as part of the mobile workforce plan, Cisco is offering a variety of smartphone devices to choose from.  This is after a one and a half to two year upgrade after first noticing Cisco’s mobile workforce in summer of 2005 with Palm Treos attached.  Cisco users in this latest upgrade cycle were offered a choice of the Nokia E61i (not the regular Nokia E61 as stated in prior article), Motorola’s Q phone, Samsung’s BlackJack and i600, RIM Blackberry and the Treo 650.   

So the Palm Treo is not completely out of the picture.  Research-in-Motion’s (NASDAQ:RIMM) is in there after all, and that makes sense considering the deployments that have worked on a cross-over basis with both companies and the related networks for some time.  Discussions with contacts inside Cisco did not indicate that Blackberry was a choice initially.  A communication from Molly Ford, one of Cisco’s PR managers, did indicate that Cisco IT continues to talk to a widerange of handset manufacturers about their future roadmaps and test devices foraddition to the internal certified range of devices, including Apple, HP, HTC,Motorola, Nokia, Palm, Samsung and RIM.   

Molly Ford also indicated that Palm worked very hard over the last couple of years to provide Cisco IT with support for its fleet and that Cisco would have no problem in picking a Palm device in the future.  So it appears the good news is that Palm is not being canned entirely.  But the choices in smartphones have increased. 

While it is not public what percentage of employees are changing devices, personal contacts have noted that it isn’t just a few here and there.  If this was the brand of a ballpoint pen or which personal ISP was being used, it wouldn’t even be a discussion. These smartphone devices are such a topic of conversation among business people and random airport travelers that any new device introductions can matter.  If this was Acme Router Co. making this change it would not be an issue.  But this is Cisco, and the company indirectly influences many technology decisions and directions outside of its own efforts.  This can create some added ripples that otherwise would not have come up.

Neither of the above points would be noted if it wasn’t for seeing this directly and hearing about it so frequently from personal and professional contacts.  Wall Street and all of its minions have become techies whether they like it or not, and this carries over into almost every field with mobile sales and support staff.  Almost on every business (or pleasure) trip from New York to Chicago to California it seems the latest smartphones are a topic of conversation.   I won’t bore you with other such examples and references that have been shared by my contact base, but that’s more than just conjecture.

Jon C. Ogg
September 11, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.

Posted on: September 11, 2007 – 2:46 pm in Consumer Electronics, Internet, Telecom, Wireless, , , , , , ,

Cisco Multi-Year Stock Highs On Guidance (CSCO)

Cisco Systems, Inc. (NASDAQ:CSCO) has boosted its longer-term growth expectations, and shares are now up 6% in after-hours as Chambers is finishing up his comments.  Obviously the company can make other comments, but this stock is now above $31.00.  That is a multi-year high and may put part of that $30.00 in the past if the market allows it.  This may play into the scanrio that we felt could take this to a $34.00 summer target, and this is showing why Jim Cramer named it his #3 growth Pick out of his Top Picks for 2007.  The networking behemoth posted $0.36 EPS on $9.43 Billion in revenues.  First Call estimates were $0.35 EPS and $9.29 Billion revenues.

Opening Commentary (partial) from Chairman & CEO John Chambers: to maintain a strong growth rate is the initial comments, and stock ticked up there… strongest quarter in balanced sales in products, record quarter in sales and EPS… book to bill was above 1… repurchased $1.5 Billion in stock… Year over Year revenues growth: routing grew 14%, switching 18%, total advance technology grew 24%…. competition is robust but they believe they are taking market share in all areas… 17 of top 20 product families grew at 15% or better, services is 16% of revenues…. Chambers said the US business was strong and balanced despite perceived slowdown in technology… service provider business was very strong… saw acceleration in video and these will need continual network upgrades and grow that exponentially… wants to lead Web 2.0 technologies (he went on and on talking up Telepresence)… Best indication is order growth in high-end routers, and it saw accelerated growth of almost 30% in Q4 in high-end routers… believes it can continue growth… network is becoming the platform… convergence is winning… continues on acquisitions and partnerships… understands where industry is going over 12-18 months and then 3-5 year strategy… Growth over next decade will be second major phase of Internet from Web 2.0 and unified communications… says this can be instant replay of what happened for Cisco in early 1990’s.

The company said it is increasing expectations for next year but not focusing on short-term.  Chambers raised longer-term guidance to 12-17% from 10-15% range previously given.  Sees 2008 now 13-16% and revenue guidance for next quarter is 9.45 to $9.55 Billion (versus $9.38 Billion estimates). 

This was also the fiscal year-end, so at $1.34 non-GAAP EPS and a $29.69 close the stock has a trailing P/E ratio (non-GAAP of course) of 22.15.  With a GAAP EPS of $1.17 for the fiscal 2007 report, this has a trailing P/E of 25.3 for those who wish to be technical and use this on a comparable basis to many of the S&P 500 companies.

As a reminder, the company can always make some comments that change gains in after-hours.  But the initial reaction is not showing this.

Jon C. Ogg
August 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: August 7, 2007 – 3:56 pm in Earnings, Technology Companies, Telecom, WiMAX, Wireless, , ,

Cisco Systems Down Modestly Ahead of Conference Call (CSCO)

The networking behemoth posted $0.36 EPS on $9.43 Billion in revenues.  First Call estimates were $0.35 EPS and $9.29 Billion revenues.  Unfortunately we don’t get guidance out of Chambers & Co. until the conference call, so until then this is just an incomplete earnings release.  Shares are currently down close to 1% in immediate after-hours trading, but again we are waiting until we have guidance before declaring a win or loss.

FOR CONFERENCE CALL COMPARISONS:  next quarter estimates are $0.36 EPS and $9.38 Billion in revenues.  If we get any fiscal July-2008 targets from the company, estimates are currently $1.55 EPS and $39.7 Billion in revenues.  If the company only gives guidance in percentages for fiscal 2008 you would get a static 2008 to 2007 implied 16.5% gain in EPS and a 14% gain in revenues.  Even after the recent drop shares are up almost 10% over the last quarter. 

This was also the fiscal year-end, so at $1.34 non-GAAP EPS and a $29.69 close the stock has a trailing P/E ratio (non-GAAP of course) of 22.15.  With a GAAP EPS of $1.17 for the fiscal 2007 report, this has a trailing P/E of 25.3 for those who wish to be technical and use this on a comparable basis to many of the S&P 500 companies.

Jon C. Ogg
August 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: August 7, 2007 – 3:19 pm in Earnings, Technology Companies, , ,

Why Does Cisco Need More Share Buybacks Now? (CSCO)

Usually a $5 Billion add-on to a share buyback plan is a good thing for shareholders, or at least they take it that way.  Last night Cisco Systems announced that its board of directors authorized an amount of up to an additional $5 Billion to be used for buying back stock.  The previous plan had reached up to $47 Billion in stock repurchases, and there is no fixed termination date for this plan.

The company believes that this is the best way to return cash to shareholders.  It also noted that in its entire buyback plan initiated since September 2001 (the worst month for the US since World War II) it has retired 2.2 Billion shares for some $41.7 Billion so far.  That represents an average price of $19.20 per share, leaving $5.3 Billion as the remaining authorized amount.

But the question is, does the company feel it needs to use this stock-stabilizing tool when shares are at 5-year highs?  It also makes one wonder if the company is having a hard time finding sizable acquisitions that it can add like its old Scientific-Atlanta deal.  Cisco may deserve to go higher yet, but it should on its own merits.  The company should either deploy this cash to make more strategic acquisitions of size.  Or if it really wants to return cash it could try the one-time special dividend as an actual return of capital while tax rates are so low on dividends. 
To top it off, $5 Billion in today’s value for Cisco isn’t what it was just last year.  With shares near $30.00 and with the stock averaging over 50 million shares per day, this would really generate about 3.3 days worth of trading volume.  If the networking and communications equipment giant wants to make these buybacks, hopefully it will only do so during periods where their stock is under pressure.  We aren’t criticizing the company itself over this too much because the management is solid, but buybacks are supposed to be done when shares are weaker than the company would expect instead of at multi-year highs. 

This doesn’t change any stance on John Chambers being one of the most entrenched CEO’s out there, but we’d still like to know if the company thinks this is the best use of current capital.   There aren’t too many VMware opportunities out there like it also announced, but there are certainly other add-on acquisition or competition-killing opportunities out there. 

Jon C. Ogg
July 27, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: July 27, 2007 – 9:25 am in Shareholder Issues, Stock Buybacks, Technology Companies, Telecom, , , ,