Cisco beats the recession
The technology giant surprises Wall Street with solid earnings as revenue climbs.
The company reported earnings of 40 cents a share Wednesday for the quarter that ended in January (its second quarter of fiscal 2010). That was 5 cents a share better than Wall Street projections.
Tech stocks had already finished strong for the day before Cisco reported. The positive surprise could be enough to keep what was one of the weakest sectors in January on the mend. (For more on the January slide in the technology sector and what it means for the market as a whole, see this recent post.)
Revenue climbed 8% from the year-ago period to $9.81 billion. The Wall Street consensus was looking for revenue of $9.41 billion.
Cash flow from operations climbed to $2.5 billion in the quarter. That was up from $1.5 billion in the first quarter of fiscal 2010, but down from the $3.2 billion of the second quarter of fiscal 2009.
Cisco Systems finished the quarter with $39.6 billion in cash and cash equivalents, a $5.2 billion increase from the second quarter of fiscal 2009.
Looking at that cash balance, I'd say Cisco has enough cash to keep buying back its stock -- the company bought back 63 million shares for $1.5 billion in the second quarter of 2010 -- and simultaneously stay on the hunt for acquisitions as well.
As of Feb. 3, I'm leaving my target price at $29 by June 2010.
At the time of this writing, Jim Jubak owned shares of Cisco Systems in his personal portfolio.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The stock rises 9% after the company reveals strong second-quarter results.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.