Can Cisco deliver another strong quarter?

The networking company surprised Wall Street with stellar numbers in its last earnings report. Investors will be watching for more of the same Wednesday.

By MSN Money Partner Aug 13, 2014 12:29PM
The Cisco logo is seen at the NCTA Cable Show in Washington, DC, on June 11, 2013 (© Andrew Harrer/Bloomberg via Getty Images)By Benjamin Pimentel, MarketWatch

Cisco Systems (CSCO) will report fiscal fourth-quarter results after the market closes on Wednesday, after surprising Wall Street in May with an upbeat results and outlook.

Investors will look for signs that would confirm Cisco's strong performance the previous quarter is a sign that the tech powerhouse is on the comeback trail.


Here's what investors can expect:


Earnings

Cisco is expected to post profit of 53 cents a share, compared with a profit of a 52 cents a share for the year-earlier period, according to a survey of analysts conducted by FactSet.


Revenue

Cisco is seen reporting sales of $12.15 billion, down from $12.42 billion in the year-ago quarter. In May, the networking giant surprised investors by saying it expected fourth-quarter sales to decline 1 percent to 3 percent, compared with analyst projections at the time of a 6 percent drop.


Stock reaction

Cisco shares have rallied about 10 percent in the last three months following the company's strong quarterly report in May when the networking giant put out the upbeat outlook. The stock is up 12 percent this year through morning trade on Wednesday, compared with a 5.1 percent gain in the Standard & Poor's 500 Index ($INX).


Key areas to watch

Cisco had struggled with the uncertainties in the corporate technology market and specific changes in the networking industry that analysts warn threaten the company's core business.

But Cisco surprised Wall Street in May with a strong report that Chief Executive John Chambers presented with a more confident and combative tone.


"Cisco seemingly turned things around last quarter as its business started to pick up following a very weak first half of its fiscal year," BMO Capital analyst Tim Long told clients in a note. "The recovery should accelerate this quarter."


"We expect Cisco to build off its momentum from last quarter and report strong results," Long added. "Cisco is still in the early stages of a turnaround, and while some parts of the business remain in flux . . . we expect solid results over the next few quarters given the building backlog, improving order trends, a good US enterprise demand environment, and increased demand for new products."


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Tags: CSCO
2Comments
Aug 13, 2014 12:54PM
avatar
Why bother? Another train wreck tech pariah. Where are the jobs, Wall Street? Recover careers or be shuttered forever.
Aug 13, 2014 6:24PM
avatar
This is how far America has fallen, the elitist brag about a company cutting workers and asking for the rest to do twice the work at half the pay. Meanwhile revenues are still the same or less of a year ago. But hey, the top 1% got paid. The rest of us can eat dirt as far as they are concerned.
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