) is set to report third-quarter fiscal 2014 results on May 14.
Last quarter, the company posted a 2.4% positive surprise. Let's
see how things are shaping up for this announcement.
Growth Factors this Past Quarter
The company's second-quarter earnings exceeded the Zacks
Consensus Estimate by a penny driven by solid expense control.
Revenues of $11.2 billion decreased 7.8% year over year and 7.4%
Also, the second quarter was weak for Cisco in terms of margin
growth. This was mainly due to unfavorable product mix and lower
For the third quarter, Cisco expects revenues to decrease in the
range of 6% to 8% on a year-over-year basis. The company expects
non-GAAP gross margin within 61-62%; non-GAAP tax rate of 21%,
yielding non-GAAP earnings per share of 47 to 49 cents.
Our proven model does not conclusively show that Cisco Systems
will beat earnings this quarter. That is because a stock needs to
have both a positive
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 43 cents. Hence, the difference is 0.00%.
Ciscohas a Zacks Rank #3 (Hold) which, when combined with a 0.00%
ESP, makes surprise prediction difficult.
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 momentum.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP and
a Zacks Rank #1, 2 or 3 such as:
Sanderson Farms, Inc.
), with Earnings ESP of +3.75% and a Zacks Rank #1 (Strong
), with Earnings ESP of +9.43% and a Zacks Rank #1.
RSP Permian, Inc.
), with Earnings ESP of +11.11% and a Zacks Rank #1.
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CISCO SYSTEMS (CSCO): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
RSP PERMIAN INC (RSPP): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
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