CSCO

Strength in the US Lifts Cisco

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Tuesday afternoon, telecommunications and network equipment maker Cisco (click ticker for report: ) reported surprisingly strong results for its fiscal year 2013 first quarter. Net sales jumped 6% year-over-year to $11.9 billion, exceeding consensus expectations. Earnings were also better than the consensus forecast, growing 12% year-over-year to $0.48 per share on a non-GAAP basis. High-margin service revenue was a major growth driver, surging 12% year-over-year to $2.6 billion, while product revenue increased 4% year-over-year to $9.3 billion. Since margins on service revenue are greater than those of product revenue, we welcome the shift in product mix towards services. SG&A also declined 150 basis points to 32%, and R&D remained flat at 15.4% of sales. Geographically, the Americas were relatively strong, … Read more

Cisco’s Fiscal Second-Quarter Results Show Turnaround Gaining Traction

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Networking-giant Cisco (CSCO) reported decent fiscal second-quarter earnings Wednesday that showed its turnaround efforts are bearing fruit. Though we will be revisiting our valuation on the company, we don’t expect to make a material change to our fair value estimate. Fourth-quarter net sales advanced 11% from the same period a year ago, while earnings per share came in at $0.47 on a non-GAAP basis, ahead of expectations. The company’s widely-watched adjusted gross margin expanded modestly to 62.4% during the quarter from 62.35% in the same period a year-ago. Non-GAAP net income advanced by over 23% from last year’s quarter, while cash from operations was $3.1 billion—better than levels achieved on both a sequential and year-over-year quarterly basis. The company continues … Read more

Cisco Reports Fiscal First-Quarter Results; Restructuring Efforts Bearing Fruit

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Cisco (CSCO) reported fiscal first-quarter results after the close Wednesday that came in better than consensus expectations. We’re comfortable with our long-term projections for Cisco and are maintaining our above-market $22 fair value estimate. Cisco’s total revenue advanced 4.7% from the same period a year ago (slightly lower than the firm’s long-term expected pace), as both product and service sales expanded. Cisco’s widely-watched gross margin fell 160 basis points, to 61.2%, in the quarter, which was about in line with what we were expecting for the period. Though gross profit expanded and research and development investment slowed, the firm’s results were weighed down by over $200 million in restructuring and other charges during the period as Cisco tries to get its … Read more

Combining Valuation and Technicals: Optimize Your Entry Point in Cisco

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At Valuentum, we feel that the best stocks will be those that are undervalued on both a DCF basis and on a relative-value basis and are just starting to demonstrate positive technical and momentum indicators. We think this allows our subscribers to identify the most attractive stocks at the most opportune time to buy. Let’s use Cisco (CSCO) to illustrate our process. For starters, we feel the firm represents a very compelling opportunity from a DCF valuation standpoint. We provide our valuation summary below and make our DCF valuation model template available here, so that readers can use it to value any firm in their portfolio. Source: Valuentum Securities, Inc.What the above valuation reveals is that we think Cisco is worth between … Read more