Cisco has posted profits of 27% but failed Wall Street Estimates and shares drop. see the Reuters report on yahoo here, or if its down, check below.
Cisco Quarterly Profit Rises 27 Percent
Tuesday August 5, 6:00 pm ET
By Ben Klayman
– News) on Tuesday said
quarterly net income rose 27 percent, but the data networking equipment maker
broke with tradition by failing to top Wall Street estimates, and its shares
“I kind of consider this a miss, because they usually beat by a penny,” said
Shawn Campbell, principal of Chicago-based Campbell Asset Management, who does
not own Cisco shares but follows the stock closely, of Cisco’s results.
Cisco shares fell 6 percent in after-hours trade on Instinet after closing at
$18.86 on the Nasdaq.
Cisco said quarterly profit rose due to market share gains in the high-end,
high-profit router and switch businesses even as weak corporate spending pushed
The San Jose, California-based company reported a net profit in its fiscal
fourth quarter of $982 million, or 14 cents a share, compared with a net profit
of $772 million, or 10 cents a share, in the year-ago quarter.
Cisco has posted its three best quarterly net profits in the last three
quarters, as it steals customers from its rivals in the cutthroat market for
the routers and switches that direct traffic on networks.
Excluding one-time items, Cisco earned 15 cents a share.
On that basis, analysts had expected Cisco to post a fourth-quarter profit
before one-time items of 15 cents a share on sales of $4.68 billion, according
to Reuters Research, a unit of Reuters Group Plc.
Sales in the quarter ended July 26 fell to $4.70 billion from $4.83 billion,
amid tight corporate spending, but rose slightly from the third quarter’s $4.62
Cisco Chief Executive John Chambers said in May the company expected
fourth-quarter sales to be even with the third quarter. However, when pressed,
he said he had an upward bias on the expected sales.
“Some people look at the United States and feel the economy is turning a
corner, and some of Cisco’s peers’ recent results made some sell-side analysts
more optimistic,” said Rob Siewert, an analyst with Victory Capital Management,
a Cleveland-based asset management company that owns Cisco shares.
Smaller rival Juniper Networks Inc. (NasdaqNM:JNPR
) last month forecast sales in the third quarter would be flat from the
previous quarter, slightly above Wall Street expectations.
Spending by corporate customers, which accounts for about 80 percent of Cisco’s
sales, has slumped in the weak economy. Demand in the beleaguered telecom
sector, which accounts for the rest of Cisco’s sales, has slumped drastically
over the past two years.
Cisco shares fell to $17.70 on Instinet in after-hours trading on Tuesday,
after closing at $18.86 on the Nasdaq.
(Additional reporting by Duncan Martell in San Francisco)</p>