Cisco beats the recession

The technology giant surprises Wall Street with solid earnings as revenue climbs.

By Jim J. Jubak Feb 3, 2010 5:58PM

Jim JubakThe recession is certainly over for Cisco Systems (CSCO)


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.

0Comments

DATA PROVIDERS

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.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

108
108 rated 1
257
257 rated 2
439
439 rated 3
626
626 rated 4
499
499 rated 5
530
530 rated 6
713
713 rated 7
522
522 rated 8
339
339 rated 9
136
136 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

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.