Cisco Systems, Inc.
) is set to report fourth quarter 2013 results on Aug 14. Last
quarter, it posted a 4% 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 quarter were above the
year-ago comparable period and the management guidance,
attributable to the ramp of several important products and
strength in the Data Center, Service Provider Video and Wireless
lines of business. Order growth was quite encouraging and the
trend reflects Cisco's superior strategy and innovation.
However, unfavorable mix and increased expenditure on new
products contained margin growth.
Cisco provided an encouraging outlook for the fourth quarter,
with revenues expected to increase in the range of 4% to 7% on a
year-over-year basis. Cisco expects non-GAAP earnings to be in
the range of 50-52 cents per share, above the Zacks Consensus
Estimate of 47 cents. GAAP earnings are expected to be in the
range of 7 to 10 cents.
The Zacks Consensus Estimate for the fourth quarter stands at
47 cents per share while that for fiscal 2013 stands at
Cisco has beaten estimates in all of the last four quarters,
with a trailing four-quarter average positive surprise of
There have been no estimate revisions in the last 30 days. As
a result, the Zacks Consensus Estimate for the fourth quarter as
well as for 2013 has remained unchanged during this time period.
The stock carries a Zacks Rank #2 (Buy).
We caution against stocks with Zacks Rank #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions
Other Stocks to Consider
Our model states that 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 to beat earnings estimates. You
could, therefore, also consider other stocks like:
), with an earnings ESP of +42.86% and a Zacks Rank #1 (Strong
), with Earnings ESP of +28.57% and a Zacks Rank #2 (Buy)
) with an earnings ESP of +5.26% and a Zacks Rank #3(Hold)
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