Cisco Systems, Inc
) is set to report third quarter 2013 results on May 15. Last
quarter it posted a 9% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
Though Cisco was affected by the sluggish macro environment,
the company's sales growth rates in the second quarter were above
the year-ago comparable period and better than management
guidance, attributable to the ramp of several important products
and strength in the Data Center, Switching and Wireless lines of
business. Order growth was quite encouraging and the trend is
reflective of Cisco's superior strategy and innovation.
However, margin expansion was limited due to an unfavorable
mix and increased expenditure on new products.
The company's restructuring activities to expand its
operations in certain strategic areas including cloud computing
and the pursuance of growth opportunities in international
markets could be potential catalysts going forward. However, we
believe that the intense competition in the company's core
businesses of routers and switches remains a matter of
Our proven model does not conclusively show that Cisco will
beat earnings estimates this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
)and a Zacks Rank #1, #2 or #3 for this to happen. That is not
the case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 45 cents. Hence, the difference is 0.00%.
Zacks Rank #4 (Sell):
We caution against stocks with Zacks Ranks #4 and #5 (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Our model states that a stock needs to have both a positive
earnings ESP and a Zacks Rank #1, #2 or #3 to beat earnings
estimates. You could, therefore, consider other stocks instead
), with Earnings ESP of +3.03% and Zacks Rank #2 (Buy)
International Game Technology
), with Earnings ESP of +3.23% and Zacks Rank #2 (Buy)
Webcom Group Inc
), with Earnings ESP of +2.38% and Zacks Rank #3 (Hold)
CISCO SYSTEMS (CSCO): Free Stock Analysis
HASBRO INC (HAS): Free Stock Analysis Report
INTL GAME TECH (IGT): Free Stock Analysis
WEB.COM GROUP (WWWW): Free Stock Analysis
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