What to Expect From Cisco Earnings

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Cisco Systems Inc. (NASDAQ: CSCO) is scheduled to report its fiscal fourth-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for $0.60 in earnings per share (EPS) on $12.57 billion in revenue. Cisco posted EPS of $0.59 and $12.84 billion in revenue in the same quarter of last year.

The networking equipment giant has a lot riding on the dollar’s strength. The recent Brexit news just made its equipment more expensive than local tech providers in Europe, as did more quantitative easing efforts of the European Central Bank.

Also, China remains a key issue for Cisco, as does the growth in India and other growth markets. Like so many other companies have to deal with, those growth markets just aren’t growing as fast as they should be.

A report from Bloomberg before earnings even came out said Cisco will cut about 20% of its worldwide workforce of approximately 73,000 employees, or about 14,000 jobs. We can expect to see more regarding this in the actual earnings report.

Keep in mind that Cisco is one of 24/7 Wall St.’s Top 10 companies to own for the decade.

A few analysts weighed in on Cisco ahead of the earnings report:

  • Cowen reiterated an Outperform rating with a $39 price target.
  • Morgan Stanley reiterated an Equal Weight rating with a $28 price target.
  • Barclays has an Overweight rating with a $34 price target.
  • Credit Suisse reiterated a Sell rating with a $24 price target.
  • Citigroup has a Buy rating with a $35 price target.
  • Oppenheimer reiterated an Outperform rating with a $34 price target.
  • Jefferies reiterated a Buy rating.
  • RBC Capital Markets reiterated an Outperform rating with a $35 price target.

So far in 2016, Cisco has outperformed the broad markets, with the stock up 18%. Over the past 52 weeks, the stock is up only 11%.

Shares of Cisco were closed trading at $31.12 on Tuesday, with a consensus analyst price target of $31.67 and a 52-week trading range of $22.46 to $31.25.

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