) is set to report second-quarter fiscal 2014 results on Feb 12.
Last quarter, it posted a 2.1% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors this Past Quarter
The company's first-quarter earnings exceeded the Zacks
Consensus Estimate by a penny. Revenues of $12.1 billion
increased 1.8% year over year but were down 2.4% sequentially.
Additionally, revenues increased year over year across most
geographies, except Asia-Pacific Japan and China (collectively
known as APJC) which declined 8.7% on a year-over-year basis.
The second quarter was strong for Cisco in terms of margin
growth. This was mainly due to favorable product mix aided by
lower variable expenses.
For the second quarter, Cisco expects revenues to decrease in
the range of 8% to 10% 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 45 cents to 47
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
(Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for
this to happen. That is not the case here as you will see
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 41 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
You could consider other stocks with a positive earnings ESP
and a Zacks Rank #1, 2 or 3 such as:
Melco Crown Entertainment Limited
), with Earnings ESP of +7.50% and a Zacks Rank #1 (Strong
Ship Finance International Limited
), with Earnings ESP of +52.63% and a Zacks Rank #1.
Salix Pharmaceuticals Ltd.
), with Earnings ESP of +18.75% and a Zacks Rank #1.
CISCO SYSTEMS (CSCO): Free Stock Analysis
MELCO CROWN ENT (MPEL): Free Stock Analysis
SHIP FIN INTL (SFL): Free Stock Analysis
SALIX PHARM-LTD (SLXP): Free Stock Analysis
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