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rffrydr
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Joined: 30 Oct 2005
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 Posted: Fri Nov 11, 2011 7:10 am Post subject: |
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Big bump, what I said aug 12th. All these guys got big benefits of dollar's fall from grace.
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HenryTo
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Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
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| Posted: Fri Nov 11, 2011 1:29 am Post subject: |
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Morningstar on CSCO's fiscal 1Q results:
| Quote: | | Cisco Systems CSCO executed well in its fiscal first quarter, demonstrating for the second consecutive quarter that recent initiatives to refocus on its core businesses are showing early signs of success. Revenue came in slightly ahead of our expectations, while operating margins were significantly higher than we had anticipated as Cisco continued to steadily improve gross margins across its switch portfolio. Importantly, Cisco generated double-digit year-over-year order growth across each of its key customer segments and geographies, suggesting that end market demand is well balanced and holding up relatively well. Services was an area of particular strength, making up for lackluster product revenue growth in the quarter. Cisco delivered its seventh consecutive quarter of double-digit service revenue growth while maintaining service gross margins of 65.1%, and this segment accounted for 20.5% of the firm's $11.3 billion in first-quarter revenue. We expect services to account for an increasingly large portion of total revenue over our five-year explicit forecast, partially because of management's increased focus on this business and partially because of the increasing maturity of the router and switch industries. This would be a welcome mix shift, in our view, as service engagements are more predictable, lead to stickier customer relationships, and are less likely to succumb to significant pricing pressure than hardware sales. Cash generation was once again healthy. The firm produced $2.1 billion in free cash flow, and its cash balance, net of debt, remains at nearly $28 billion, or $5 per share . The company bought back $1.5 billion in stock at an average price of $15.37 per share and paid out $322 million in dividends. In aggregate, Cisco returned nearly 90% of free cash flow generated in the quarter to shareholders, and we believe that management should continue to aggressively repurchase shares while they remain undervalued. Management expects year-over-year revenue growth of 7%-8% in its second quarter, which would represent a positive first step toward its three-year annualized revenue growth target of 5%-7%. Moreover, the firm expects earnings per share growth to outpace revenue growth during the second quarter, a welcome departure from previous quarters' disappointing results. Although Cisco is on track to outperform our 2012 earnings estimate, we believe our five-year forecast adequately captures the firm's long-run opportunities, and we are maintaining our $26 fair value estimate. Cisco still faces a number of long-run threats to its core franchises of switches and routers, and we believe increasing competition from Huawei and an ongoing shift toward cloud computing will pressure Cisco's competitive advantage--and product gross margins--over time. Still, given Cisco's balance sheet strength, improved execution, still-solid competitive position and attractive valuation, we continue to find the shares compelling at their current market price. |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16441
Location: Sunny California
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| Posted: Fri Aug 12, 2011 7:16 am Post subject: |
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Big "buy and hold" interests here, as well as the tech faithful. Their faith has long since bottomed and this upturn will be a good backstop to the market. Cisco punches far above its weight here.
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HenryTo
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| Posted: Thu Aug 11, 2011 11:01 pm Post subject: |
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Morningstar on CSCO's fiscal 4Q results:
| Quote: | | Cisco's CSCO fiscal fourth-quarter results suggest that the firm's efforts to strengthen its competitive position are starting to pay off. Revenue, gross margin, and operating margin all came in slightly ahead of our expectations, and management's fiscal first-quarter guidance suggests that incremental near-term gross margin deterioration will be more than offset by operating expense reduction. We believe gross margins are beginning to stabilize, and we are maintaining our fair value estimate. Although Cisco's switch revenue fell 4% from the previous year's results to $3.4 billion, this result outperformed our expectations by more than $100 million. CEO John Chambers noted that the firm's switch port and revenue shares were stable from the previous quarter, which we believe is plausible, given recent weak quarterly results from some of Cisco's peers. Cisco's product gross margins also remained fairly stable compared with recent results, and Chambers said the firm's switch gross margins fell roughly 140 basis points in fiscal 2011 from the previous year. We continue to expect Cisco's switch business to grow, albeit slowly, and maintain that gross margins are approaching a bottom. Cisco's new product segment grew 7% from the previous year to $3.5 billion. Strong growth in collaboration, data center, and wireless was partially offset by sluggish results from the video connected home business and declines in security. The new product segment now accounts for roughly 31% of Cisco's revenue, and we expect this business to continue to outpace growth in routers and switches over time. Cash generation was once again healthy. The firm generated $2.6 billion in free cash flow, and its cash balance, net of debt, now stands at nearly $28 billion, or $5 per share. The company bought back $1.5 billion in stock at an average price of $15.85 per share and paid out $329 million in dividends. CFO Frank Calderoni said the firm would be opportunistic in its share repurchases; we would like to see Cisco accelerate its pace of buybacks while its stock remains significantly undervalued. Management expects year-over-year revenue growth of 1%-4% in its fiscal first quarter, as relatively healthy order growth from its enterprise, commercial, and service provider customer segments is being partially offset by continued weakness in the public sector. This sentiment echoes recent comments from other data networking vendors, and we expect weakness in the public sector to persist. |
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HenryTo
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Posts: 11260
Location: Los Angeles, California
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| Posted: Thu May 12, 2011 2:09 pm Post subject: |
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Morningstar on CSCO's 3Q results:
http://quicktake.morningstar.com/Stocknet/381137/ciscos-restructuring-begins.aspx?symbol=CSCO
| Quote: | Cisco CSCO delivered fiscal third-quarter results that were above our expectations, but management's fourth-quarter revenue outlook (flat or slightly up year over year) is below our current forecast. While we are trimming our near-term revenue projections, the effect on our $30 fair value estimate is negligible. Increasing competition and restructuring efforts present significant near-term challenges, but we believe management is positioning the firm for continued earnings growth and better capital allocation over the longer term.
Switches, which accounted for 30% of Cisco's third-quarter revenue, continue to be our primary area of concern. Sales of switches grew sequentially, but fell roughly 9% from last year as the firm faces broad-based competitive pressure from Hewlett-Packard HPQ and emerging threats from Juniper JNPR and Arista in data center environments. We expect Cisco to price aggressively in high-end switches to maintain share, while ceding share in more commodified segments, such as unmanaged, low-density switches. We think this strategy makes sense over the long run as Cisco's competitive advantage is strongest in mission-critical environments within the enterprise. As we have outlined in our thesis, we expect the net effect of Cisco's strategy will be moderate share loss and ongoing gross margin pressure in switches.
Cisco also provided more clarity on its restructuring plan. Management expects to take a charge of between $500 million and $1.1 billion next quarter as a result of its recently announced early retirement program. CEO John Chambers provided more information on efforts to streamline the management structure, noting that the company has reduced the number of management councils from nine to three and the number of management boards from 42 to 15. In all, Cisco plans to remove $250 million in quarterly operating expenses by the third quarter of fiscal 2012, or roughly 6% of total operating expenses. We think it can achieve these savings with no affect on its long-run competitive position. |
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rffrydr
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Joined: 30 Oct 2005
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| Posted: Thu Apr 14, 2011 8:45 am Post subject: |
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FLIP RIP: Was very curious about the demise of this product as Flip camera promised to be the perfect real-world analogue to YouTube in the context of a generation that only understands video.
http://news.cnet.com/8301-30686_3-20053337-266.html
That Cisco could kill it while still nominally profitable complicates that matter. That it doesn't carry the margins of mainstream Cisco products just underscores how rich the parent is. ....But, looming in the shadows is that other killer app: the smartphone. Android and iPhone strikes again.
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rffrydr
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| Posted: Tue Apr 05, 2011 7:02 pm Post subject: |
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Night of Long Knives?
http://www.cnbc.com/id/42436591
If I bought "tech" I'd thought the recent disappointments might be a buy. Order book is loaded to the gills and Muni deleveraging will bounce back as it is this very tech that will enable them to do more with less (people).
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu Feb 10, 2011 1:49 pm Post subject: |
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Morningstar on CSCO's 2Q earnings:
| Quote: | Cisco (CSCO) dutifully beat management's revenue projection for the second quarter, but gross margins were a big disappointment. Assuming that Cisco can continue to deliver revenue growth in line with our 10%-11% expectations, and assuming that gross margins do not recover at all from the current quarter, we'd be looking at a slight haircut to our fair value estimate.
Management broke out the year-over-year decline in gross margins as follows: 100 basis points was attributable to the consumer business, which fell 15% year over year; 100 basis points was attributable to product transitions in the switching business; and 50 basis points was attributable to growth in the relatively low-margin Unified Computing System business. Weak performance in the consumer business was not surprising, as we don't view Cisco a serious player in that market. We've been expecting UCS to exert margin pressure, so that wasn't a surprise.
We think management's explanation of the weakness in switch margins was credible--the firm is rolling out several new product lines, and new products typically generate lower margins right after launch. (CEO John Chambers used the example of the Nexus 7000, which saw gross margins improve by 700 basis points over the first five quarters after launch.) We were concerned to hear that switch revenue fell 7% year over year, and while backlog is up and management expects growth to rebound over the next couple of quarters, this is something that investors should be watching under a microscope, given the importance of the switch business. That said, we've seen no evidence that Cisco is losing share in switches.
In the previous quarter, two areas--public sector and set-top boxes--caused significant pain, and that pain doesn't seem to be abating. During the conference call, Chambers struck a pessimistic note, saying that while public-sector revenue grew 7% year over year (9% in the United States), he expected the situation to worsen because of budget constraints across countries and across layers of government, and growth could dip into the low to mid-single digits.
The set-top box business continues to suffer, falling 11% year over year, with a 29% year-over-year decline in cable boxes being partially offset by a 47% increase in IPTV boxes. Chambers discussed how that business is no longer about set-top boxes and is instead a "software architecture game," but we are leaning toward the view that Cisco should examine ways to get out of that no-moat business (and the no-moat consumer business while it is at it) as long as it doesn't endanger its relationships with the telecom carriers.
While we are disappointed in the margin erosion in the quarter, our overall thesis is unchanged. Cisco continues to be well positioned in its switching and routing businesses (allowing for the product transitions and backlog increase in switching), and the areas that seem to be giving management the most heartburn are ones in which we're not thrilled it participates to begin with. |
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rffrydr
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu Nov 11, 2010 12:13 pm Post subject: |
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Morningstar on CSCO's 1Q results:
| Quote: | | Cisco's CSCO first-quarter results, released Wednesday, were mixed and its revenue forecasts for the rest of the year were disappointing. However, we are leaving our fair value estimate unchanged. Revenue growth remained robust at 19.2%, and operating expenses remained basically flat as a percentage of revenue. The only real blemish on the quarter's financials was a gross margin contraction to 62.8% from 65.3% in the year-ago quarter as a result of price pressure and product mix. We're likely to reduce our full-year revenue forecast, but not enough to change our fair value estimate. However, Cisco's guidance for the second quarter and the full year was disappointing and resulted in what we would characterize as a fairly contentious question-and-answer session between management and analysts. Management blamed the weak forecast on three primary issues: a slowdown in government spending, European spending, and weakness in its cable television (primarily set-top boxes) business. The last issue had two components--a weak market for set-top boxes driven by languishing subscriber growth and market share losses. Cisco specifically named Motorola MOT as gaining share, but we believe smaller competitors selling no-frills set-top boxes are also gaining share. CEO John Chambers argued that there is nothing structurally wrong with Cisco, and that the firm's disappointing revenue growth for the full year (mostly because of an expected weak second quarter) is simply the result of two of the firm's business lines hitting a rough patch at the same time. He buttressed his argument by pointing to Cisco's strength in edge routing, core routing, and its nascent server business, which based on this quarter's revenue is now running at an annual revenue rate of $500 million and growing extremely rapidly. He did, however, admit that the firm was caught flat-footed by the downturn in revenue growth. Given that Cisco has a strong reputation for having forward-looking visibility into macro trends a couple of quarters out, this was very surprising. In the past, we've argued that perhaps Cisco has moved too far afield from its core businesses with some of its acquisitions, and now that discussion will probably become more heated since many of Cisco's smaller competitors, like Aruba ARUN and F5 FFIV, are blowing the doors off (and taking share from) Cisco in areas tha t are more core to Cisco's traditional networking business than some areas that it has been entering. We don't believe Cisco is broken, but we think its long-term revenue growth target of 12%-17% is overly aggressive for a firm of its size and could lead to more of these types of surprises. |
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rffrydr
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| Posted: Thu Nov 11, 2010 7:14 am Post subject: |
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Cisco fails on government contracts and utilities. Cisco fails. And you thought you were riding the vanguard of the free market.
Proves once again there are no free markets.....and let's not even get started on that new Silicon Valley startup industry, solar.
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HenryTo
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| Posted: Thu Aug 12, 2010 4:01 pm Post subject: |
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Morningstar on CSCO's 4Q and full-year earnings:
| Quote: | | Cisco CSCO reported strong revenue growth and operating margin expansion during both the fourth quarter and full-year, but management's cautious statements about the current outlook for IT spending spooked investors, and could signal a weaker fiscal year 2011. We're not changing our fair value estimate, but we may trim our fiscal year 2011 estimates by a small amount. After a weak start, Cisco finished its fiscal year 2010 on a strong note, and was generally in line with our expectations. Revenue growth squeaked in a little higher than we expected, as the firm's refreshed product portfolio gained traction. Gross margins were a little weaker than we expected on both products and services, and since they were only up marginally over their fiscal 2009 level (a year in which revenues declined nearly 9%), this suggests to us that the firm may have used aggressive pricing to close more business by quarter's end. Operating expenses were substantially lower than we expected on a combination of lower research and development, or R&D, spending, and lower amortization expenses. Despite what we saw as healthy results for the fourth quarter, a couple of data points gave us some concern that the company had to push to meet its revenue goals during the final weeks of the quarter. In addition to our guess that weaker-than-expected gross margin expansion could be signaling that the firm may have had to price a bit aggressively to close sales, the fact that accounts receivable grew nearly double the rate of revenue year-over-year suggests that either customers demanded looser terms to close deals, or that an unusual amount of business closed at the very end of the quarter. Finally, CEO John Chambers' comments during the call suggested that--after a couple of quarters of clear recovery--Cisco, and the technology hardware industry as a whole, could be headed back into rough waters. Cisco typically has excellent visibility into near-term corporate IT spending, and is often the first to note the beginning of an upward or downward cyclical swing. Given this, Chambers' words of caution (which included phrases like "unusual uncertainty" and "unusual amount of conservatism") spooked investors--especially coming on the heels of such a terrible day for technology stocks in general. |
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arco
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Joined: 19 Oct 2006
Posts: 13
Location: New Zealand
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| Posted: Sat Mar 13, 2010 4:26 pm Post subject: |
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Ichimoku confirmed a buy on the 1st March, but suggests caution where the Chikou potential resistance lies (yellow box). I would now expect to see a retracement just below this point
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HenryTo
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Posts: 11260
Location: Los Angeles, California
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| Posted: Tue Mar 09, 2010 5:11 pm Post subject: |
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New, next-gen router from Cisco. This is pretty darn fast:
http://www.informationweek.com/news/hardware/grid_cluster/showArticle.jhtml?articleID=223300149&subSection=All+Stories
| Quote: | Cisco claims the CRS-3, which will be available in a few months for prices beginning at $90,000, has 12 times the traffic capacity of its nearest competing system. The Tuesday announcement was hyped for weeks as an event that would "change the Internet forever," and the implication now is that Cisco is betting on the CRS-3 as its entry in the race to roll out 100G networks.
Pankaj Patel, SVP and general manager of Cisco's Service Provider Business, predicted the CRS-3 will become the company's flagship router of the future and will form the foundation of intelligent and advanced broadband networks in the Internet.
The presentation Tuesday also featured an appearance by AT&T's Keith Cambron, who talked about the carrier's successful 100G field trial between Florida and Louisiana as a harbinger of better networking things to come. Cambron, who is president and CEO of AT&T Labs, noted that AT&T's video traffic is growing at a rate of 80% a year.
AT&T has been under pressure to speed up its wireless network, because its exclusive arrangement with Apple to provide the iPhone has pressured AT&T's mobile network while the carrier's landline broadband struggles to keep up with growing traffic.
Praising Cisco's CRS-3, Cambron said: "We are entering the next stage of global communications and entertainment services and applications, which requires a new set of advanced Internet networking technologies. AT&T's network handled 40% more traffic in 2009 than it did in the previous year and we continue to see this growth in 2010." |
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HenryTo
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Posts: 11260
Location: Los Angeles, California
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| Posted: Thu Feb 25, 2010 1:01 am Post subject: |
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Still one more trick up their sleaves:
------------------------------------------------------------------------------------------------
Cisco to unveil network boost for Internet - source
Wed Feb 24, 2010 10:22pm GMT
NEW YORK, Feb 24 (Reuters) - Cisco Systems Inc (CSCO.O) will announce in March new technology for communications service providers to offer more advanced, high-speed Internet connections, a source familiar with the plan said on Wednesday.
The move comes as the U.S. Federal Communications Commission plans to demand faster Internet speeds as part of its National Broadband Plan to be unveiled on March 17.
Cisco said on Wednesday it will unveil technology on March 9 that will "forever change the Internet." On its website, the network equipment maker said the change would show "what's possible when networking gets an adrenaline boost."
The company declined to elaborate, but the source said the technology would help telecom service providers like phone companies offer better, high-speed Internet service.
The FCC wants minimum Internet data transmission speeds of 100 megabits per second (Mbps) to 100 million homes within a decade, compared with current industry estimates of less than 4 Mbps.
Google Inc (GOOG.O) has also rattled the service provider industry with a plan to build a super-fast Internet network of its own.
Cisco is the world's top maker of routers, switches, and other network equipment that help phone companies and corporations manage their networks and enable faster, more stable Internet connections. |
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