Cisco's recent targeting scared investors because stocks have plummeted.
Currently the company goes to another model, which is a temporary obstacle.
This population still offers great value to shareholders in the meantime.
After the release of Cisco's most recent results (NASDAQ: CSCO), it was clear that investors were far from satisfied with what the administration had to say. The low guidance that was given was reason enough for many shareholders to dispose of their shares. A drop of ten percent of the stock price was the consequence. However, it is important to reconsider the company and its valuation to determine if it is advisable to follow these investors and stay away from this population or if this decrease has created the opportunity to invest at lower levels. I think this is the last, since Cisco still has great potential.
The numbers
The quarterly report that preceded the sale was issued on May 17 and contained third quarter results. While Cisco saw its sales decline of 1% year-over-year, the company managed to exceed analysts' expectations for sales and its EPS. Part of the reason for the decline in revenue is due to the fact that the third quarter was a shorter week this year compared to the previous year. That makes a difference of about 265 million, of which 200 million were in services and another 65 million SaaS business. This means that the company would not have seen revenue decline year on year if the number of weeks in the quarter had been identical. At the same time, it saw its EPS year-on-year increase of $ 0.03 to $ 0.60.
So it does not look too bad. Cisco has performed well during the quarter, with a slight drop in revenue as a result of a difference in the number of weeks. The main problem that investors have in this publication was that management had driven down year-on-year turnover from 4 to 6% for the next quarter. I understand the concern of investors facing this negative trend, but I think it is not as bad as some people think.
Monday, 29 May 2017
Sunday, 14 May 2017
Even With Slight Stumble, Cisco's Strong Ethernet Switching Position Fuels My Confidence
Cisco (NASDAQ:CSCO) is one of those stocks that left a lot of investors broken hearts after the latest bull markets. The internet stock bubble hit Cisco shareholders particularly hard, as it was one of those stocks that had a P/E over 100 for quite a while.
Like many technology stocks at that time, earnings didn't have to be that impressive as long as fools were buying and greater fools were buying at higher prices. Looking back at the growth during that time, which for revenue and net income was above 10% at the beginning of the bubble, it was a good business model indicator, but not enough to justify the crazy valuations to follow. The 2009 bear market hit CSCO shareholders as well, but the losses were not nearly as destructive as in the early 2000s. You can attribute this difference to the difference in valuations.
Nowadays, the stock is trading at much more reasonable valuations. Growth, while not as pronounced as the early days, is still fairly reasonable and is moving towards a consistent long-term trend. CSCO was a stock I really liked back in February 2016, so I recommended it in The Sather Research eLetter and added it to the Real Money Portfolio of the eLetter. Since then, the stock has returned about 48.1% including dividends.
With a current 6-year streak of consecutively increasing the dividend and a growth rate of 24.7% over the last 3 years, the potential returns from dividends only add to the attractiveness of this stock - one that has been on a tear over the past couple of years. The dividend yield reached as high as 3.7% around the time I added the position, which combined with the recent dividend growth rate creates a very high potential yield on cost for the foreseeable future.
The current yield of 3.47% may attract more yield seeking investors moving forward, hopefully pushing up the stock higher as others wish to participate in the party.
Like many technology stocks at that time, earnings didn't have to be that impressive as long as fools were buying and greater fools were buying at higher prices. Looking back at the growth during that time, which for revenue and net income was above 10% at the beginning of the bubble, it was a good business model indicator, but not enough to justify the crazy valuations to follow. The 2009 bear market hit CSCO shareholders as well, but the losses were not nearly as destructive as in the early 2000s. You can attribute this difference to the difference in valuations.
Nowadays, the stock is trading at much more reasonable valuations. Growth, while not as pronounced as the early days, is still fairly reasonable and is moving towards a consistent long-term trend. CSCO was a stock I really liked back in February 2016, so I recommended it in The Sather Research eLetter and added it to the Real Money Portfolio of the eLetter. Since then, the stock has returned about 48.1% including dividends.
With a current 6-year streak of consecutively increasing the dividend and a growth rate of 24.7% over the last 3 years, the potential returns from dividends only add to the attractiveness of this stock - one that has been on a tear over the past couple of years. The dividend yield reached as high as 3.7% around the time I added the position, which combined with the recent dividend growth rate creates a very high potential yield on cost for the foreseeable future.
The current yield of 3.47% may attract more yield seeking investors moving forward, hopefully pushing up the stock higher as others wish to participate in the party.
Tuesday, 2 May 2017
Cisco Is Paying $610 Million For This Networking Startup
The second acquisition of Cisco in the new year is another great.
The giant network said on Monday it expects to pay $ 610 million to start Viptela, which sells a network technology that allows companies to connect their branch offices to corporate data centers.
Viptela, founded in 2012 by ex-Cisco engineers (CSCO) has invested nearly 110 million dollars of investment. The start of the $ 75 million financing cycle in May 2016 earned him a pre-financing assessment of $ 825 million, according to the Pitchbook investment tracking site.
The latest Cisco transaction following the acquisition of $ 3.7 billion AppDynamics senior corporate software company that closed in March.
A Cisco spokesman said the company expects "most Vitpela employees" to join Cisco and "share more details in the coming weeks." Viptela has about 120 employees, according to Pitchbook.
In January, Praveen Akkiraju, a former Cisco fighter 19, senior vice president of its business networking group, became the new CEO of Viptela.
The acquisition is the fact that Cisco's core switching and routing activities gradually declined as new companies refuse to buy data center equipment and at the same time buy IT resources at the request of giants like Amazon web services (AMZN) and Microsoft (MSFT). To offset declines, Cisco has invested heavily in software through major acquisitions such as AppDynamics and the purchase of $ 635 million in OpenDNS 2015 security.
The acquisition of Cisco gives a vendor who sells much of its technology through AWS, which could help gain more customers using cloud services instead of buying data center equipment. Nearly 90% of Viptela customers use a version of their network technology provided by AWS, according to an article published in January in the specialized SDX central publication.
Competitors include other Viptela companies such as CloudGenix and Network Networks.
It is not clear if Cisco will keep the Viptela name. Cisco spokesman said "it is too early to make that decision."
The agreement must be completed in the second half of 2017.
The giant network said on Monday it expects to pay $ 610 million to start Viptela, which sells a network technology that allows companies to connect their branch offices to corporate data centers.
Viptela, founded in 2012 by ex-Cisco engineers (CSCO) has invested nearly 110 million dollars of investment. The start of the $ 75 million financing cycle in May 2016 earned him a pre-financing assessment of $ 825 million, according to the Pitchbook investment tracking site.
The latest Cisco transaction following the acquisition of $ 3.7 billion AppDynamics senior corporate software company that closed in March.
A Cisco spokesman said the company expects "most Vitpela employees" to join Cisco and "share more details in the coming weeks." Viptela has about 120 employees, according to Pitchbook.
In January, Praveen Akkiraju, a former Cisco fighter 19, senior vice president of its business networking group, became the new CEO of Viptela.
The acquisition is the fact that Cisco's core switching and routing activities gradually declined as new companies refuse to buy data center equipment and at the same time buy IT resources at the request of giants like Amazon web services (AMZN) and Microsoft (MSFT). To offset declines, Cisco has invested heavily in software through major acquisitions such as AppDynamics and the purchase of $ 635 million in OpenDNS 2015 security.
The acquisition of Cisco gives a vendor who sells much of its technology through AWS, which could help gain more customers using cloud services instead of buying data center equipment. Nearly 90% of Viptela customers use a version of their network technology provided by AWS, according to an article published in January in the specialized SDX central publication.
Competitors include other Viptela companies such as CloudGenix and Network Networks.
It is not clear if Cisco will keep the Viptela name. Cisco spokesman said "it is too early to make that decision."
The agreement must be completed in the second half of 2017.
Monday, 24 April 2017
Cisco Systems Inc. (CSCO) Closes 1.4% Up on the Day for April 24
Shares of Cisco Systems Inc. (CSCO) ended Monday at $ 33.28 trading days, representing a 1.4% change, or $ 0.46 per share in a volume of 15, 17 million shares .
Cisco Systems Inc. is dedicated to the design, manufacture and sales of Internet Protocol (IP) -based products and services related to the information and communications technology (IT) industry.
After opening the day at $ 33.24, shares of Cisco Systems Inc. have traded between $ 33.13 and $ 33.36. Cisco Systems Inc. currently has a total flow of 5.01 billion shares and, on average, saw 16.8 million shares exchanged hands each day.
The stock now has 50 days of SMA $ 33.33 and the 200 day moving average $ 30.88 and has a maximum of $ 34.53 and a minimum of $ 25.81 over the past year. Their P / E ratio of 16.9 and P / B of 2.61.
Cisco Systems Inc. is headquartered in San Jose, California and has 71,959 employees. The CEO of the company.
For a deeper dive into the basics of Cisco Systems Inc., visit Equities.com's market valuation report for CSCO. Want to invest with the experts? Subscribe to premium news bulletins today! Visit http://www.equitiespremium.com/ Market commentary of more of the investment guild and search stocks of Adam Sarhan leaders today.
The oldest and most cited Dow Jones Industrial Average stock index in the US equity market. With other major indexes such as the S & P 500 and Nasdaq, it remains one of the most visible representations of the stock market in the outside world. The index consists of 30 frontline companies and is a weighted index of prices compared to a weighted market index. This approach has made it somewhat controversial among market watchers. (The Dow Jones is a relic and we have to move) The history of the index dates back to 1896 when it was created by Charles Dow, founder founding editor of The Wall Street Journal and founder of Dow Jones & Company, and Edward Jones , A statistician. The index of indexed prices has become a standard part of most of the most important news of each day and saw dozens of different companies spend in their ranks, and only General Electric (GE $) remain in the index since its inception.
To learn more about Cisco Systems Inc. and follow the latest company updates, visit the company profile page here: CSCO profile. For more information on financial markets and emerging growth companies, do not forget to visit Newsdesk Equities.com. Also, do not forget to subscribe to our daily newsletter to make sure you do not miss our best stories.
All data provided by QuoteMedia were exact and 4:30 ET.
Cisco Systems Inc. is dedicated to the design, manufacture and sales of Internet Protocol (IP) -based products and services related to the information and communications technology (IT) industry.
After opening the day at $ 33.24, shares of Cisco Systems Inc. have traded between $ 33.13 and $ 33.36. Cisco Systems Inc. currently has a total flow of 5.01 billion shares and, on average, saw 16.8 million shares exchanged hands each day.
The stock now has 50 days of SMA $ 33.33 and the 200 day moving average $ 30.88 and has a maximum of $ 34.53 and a minimum of $ 25.81 over the past year. Their P / E ratio of 16.9 and P / B of 2.61.
Cisco Systems Inc. is headquartered in San Jose, California and has 71,959 employees. The CEO of the company.
For a deeper dive into the basics of Cisco Systems Inc., visit Equities.com's market valuation report for CSCO. Want to invest with the experts? Subscribe to premium news bulletins today! Visit http://www.equitiespremium.com/ Market commentary of more of the investment guild and search stocks of Adam Sarhan leaders today.
The oldest and most cited Dow Jones Industrial Average stock index in the US equity market. With other major indexes such as the S & P 500 and Nasdaq, it remains one of the most visible representations of the stock market in the outside world. The index consists of 30 frontline companies and is a weighted index of prices compared to a weighted market index. This approach has made it somewhat controversial among market watchers. (The Dow Jones is a relic and we have to move) The history of the index dates back to 1896 when it was created by Charles Dow, founder founding editor of The Wall Street Journal and founder of Dow Jones & Company, and Edward Jones , A statistician. The index of indexed prices has become a standard part of most of the most important news of each day and saw dozens of different companies spend in their ranks, and only General Electric (GE $) remain in the index since its inception.
To learn more about Cisco Systems Inc. and follow the latest company updates, visit the company profile page here: CSCO profile. For more information on financial markets and emerging growth companies, do not forget to visit Newsdesk Equities.com. Also, do not forget to subscribe to our daily newsletter to make sure you do not miss our best stories.
All data provided by QuoteMedia were exact and 4:30 ET.
Monday, 10 April 2017
Cisco's Board Has Some Explaining To Do
Over the past five years, Cisco's board of directors has sold $ 27 billion in reimbursements. What do you think?
Cisco CEO John Chambers warned that three years ago the transition to cloud computing would throw the future of the IT industry in an earthquake. Specifically, he said publicly that Cisco was in the midst of a "sudden and brutal consolidation of the IT industry where the top five players, only two or three of us will have a way as fast as five years."
To make matters worse, John Chambers himself has endorsed his words by selling Cisco shares in his personal portfolio. On Cisco Live Day May 19, 2014, when the cameras described the "brutal and brutal consolidation" that Cisco has found, it has sold about $ 50 million of shares, as reported by Barron. A year earlier, in May 2013, and probably already aware of Cisco's risk, they will sell about $ 38.5 million of shares Cisco has also reported Barron. And for the past three years, it continued to receive incentive grants - and continued to sell.
So why board otherwise with shareholder money? Why does Cisco continue stock repurchases when its chief executive is trying to sell?
The sale of rooms makes sense; Cisco does not make refunds
I think Cisco, now a 32-year-old technology company clearly faces existential threats.
The company has become the largest business networking establishment in the world, but in the rapid shift of IT spending to the cloud, Cisco's growth has become "anemic," according to one analyst. Sales for Cisco's most recent quarterly business fell 3 percent in the development of long-term securities holders.
The disturbance due to the cloud rapidly eroding Cisco's core business on routers and network equipment. In its most recent quarter, Cisco reported that its alternative revenue decreased 5% to $ 3.31 billion, while routing revenues were hit, down 10%. We are already beginning to see the effects of these changes: Last summer, Cisco laid off 5,500 employees, or seven percent of its workforce.
The problem for Cisco? None of the three providers of the super-scale cloud - Amazon, Microsoft and Google - who are not interested in expensive routers and Cisco networking equipment. (Full Information: Owning Amazon Stocks) These vendors use basic equipment optimized and managed by the software, not written and sold by Cisco.
Cisco also tried to be a player in the public cloud, but seems to have failed. In December 2016, Cisco confirmed reports that killed its proposed 1 billion cloud. "Notice another victory in the body of the Amazon Web Services unstoppable bag," said Julie Bort of Business Insider. "Its rapid success has cost many victims since last year."
Cisco reimbursements are ridiculous
Before criticizing the Cisco board to put shareholders at risk with reckless reimbursements, make it clear: they have the legal authority to do so. Before the SEC did not change the rules in 1982, stock market purchases of corporate stocks were illegal and considered a form of market manipulation.
But in 1982, the SEC instituted Rule 10b-18, which allowed companies to acquire treasury stock with impunity. Under Rule 10b-18, many companies like Cisco have been aggressive buyers, I was told "capital return to shareholders." Since 2001, Cisco has spent about $ 96.6 billion in repurchase, accounting for approximately 57% of the total market value of the company today. Think about this.
For every dollar of revenue over the last five years, Cisco has spent 18 cents on repayments. Here the problem is not described or explained to shareholders and should not be explained through the legal coverage provided by Rule 10b-18 dollars spent on repurchase to increase risk for long-term shareholders.
Cisco CEO John Chambers warned that three years ago the transition to cloud computing would throw the future of the IT industry in an earthquake. Specifically, he said publicly that Cisco was in the midst of a "sudden and brutal consolidation of the IT industry where the top five players, only two or three of us will have a way as fast as five years."
To make matters worse, John Chambers himself has endorsed his words by selling Cisco shares in his personal portfolio. On Cisco Live Day May 19, 2014, when the cameras described the "brutal and brutal consolidation" that Cisco has found, it has sold about $ 50 million of shares, as reported by Barron. A year earlier, in May 2013, and probably already aware of Cisco's risk, they will sell about $ 38.5 million of shares Cisco has also reported Barron. And for the past three years, it continued to receive incentive grants - and continued to sell.
So why board otherwise with shareholder money? Why does Cisco continue stock repurchases when its chief executive is trying to sell?
The sale of rooms makes sense; Cisco does not make refunds
I think Cisco, now a 32-year-old technology company clearly faces existential threats.
The company has become the largest business networking establishment in the world, but in the rapid shift of IT spending to the cloud, Cisco's growth has become "anemic," according to one analyst. Sales for Cisco's most recent quarterly business fell 3 percent in the development of long-term securities holders.
The disturbance due to the cloud rapidly eroding Cisco's core business on routers and network equipment. In its most recent quarter, Cisco reported that its alternative revenue decreased 5% to $ 3.31 billion, while routing revenues were hit, down 10%. We are already beginning to see the effects of these changes: Last summer, Cisco laid off 5,500 employees, or seven percent of its workforce.
The problem for Cisco? None of the three providers of the super-scale cloud - Amazon, Microsoft and Google - who are not interested in expensive routers and Cisco networking equipment. (Full Information: Owning Amazon Stocks) These vendors use basic equipment optimized and managed by the software, not written and sold by Cisco.
Cisco also tried to be a player in the public cloud, but seems to have failed. In December 2016, Cisco confirmed reports that killed its proposed 1 billion cloud. "Notice another victory in the body of the Amazon Web Services unstoppable bag," said Julie Bort of Business Insider. "Its rapid success has cost many victims since last year."
Cisco reimbursements are ridiculous
Before criticizing the Cisco board to put shareholders at risk with reckless reimbursements, make it clear: they have the legal authority to do so. Before the SEC did not change the rules in 1982, stock market purchases of corporate stocks were illegal and considered a form of market manipulation.
But in 1982, the SEC instituted Rule 10b-18, which allowed companies to acquire treasury stock with impunity. Under Rule 10b-18, many companies like Cisco have been aggressive buyers, I was told "capital return to shareholders." Since 2001, Cisco has spent about $ 96.6 billion in repurchase, accounting for approximately 57% of the total market value of the company today. Think about this.
For every dollar of revenue over the last five years, Cisco has spent 18 cents on repayments. Here the problem is not described or explained to shareholders and should not be explained through the legal coverage provided by Rule 10b-18 dollars spent on repurchase to increase risk for long-term shareholders.
Thursday, 30 March 2017
Cisco's Reported Move to Sell OS Software Appears to Be a Pragmatic Response
Cisco's Reported Move to Sell OS Software Appears to Be a Pragmatic Response to Big Threat
The use of investment and procurement software and services, R & D, Cisco may continue to increase in the coming years despite the startup and fall of routing. But they can not allow the bottom to withdraw from these companies due to rigid competition pressure, trends and technological developments in IT spending patterns. In this context, the plans informed by the company to review their replacement strategy have a logic for them. But it is also worth asking if Cisco go even further in time.
Markets can be unpredictable, but Jim Cramer can show you how to navigate like a pro. Follow the first order in the stock portfolio PLUS Action Alerts. Join today and try it for 14 days FREE!
Cisco announced Tuesday that it "plans to sell operating system software" to cheaper switch users running on third-party Broadcom Switching (AVGO) chips, allowing them to avoid buying more powerful or expensive switches that Operate Cisco proprietary ASICs. Engineers are said to run on the operating system, which is called Lindt.
The report is a bit tricky at first, since all Cisco switches come with one of the business operation systems. Cisco Nexus switches, which generally fall into data centers operate on the Cisco NX-OS. Its Catalyst switch line, which is primarily used in campus and branch environments, runs on some version of the iOS operating system (not to be confused with the Apple OS OS of the same name), while most Cisco routers.
But while all Cisco Nexus use the same operating system, they do not all have the same software. The Nexus 9000 switches the company, most of which runs on ASIC, support the network platform (SDN) defined by the AIT software, which (with the help of a driver software) enables enterprises to quickly allocate Network resources and set policies for applications running in a data center, and gain better visibility into how they work. The less powerful Nexus 3000 line based on the Trident II and Tomahawk Broadcom switching chips is not compatible with AIT.
It is important to note that Cisco NX-OS has rewritten to support the AIT, and Nexus 9000 switches using ACI have an independent boot mode. So, one possibility is that Cisco plans to start taking load from ACI changes to Broadcom.
Cisco has an interest in the shares of the Trust portfolio Jim Cramer PLUS Charitable Trust. Would you like to receive alerts before Cramer buys or sells CSCO?
Cisco claims a high Nexus 9000 and ACI usage; It added 1300 Nexus 9000 customers and 450 AIT quarter of January, which helped increase its total base from 10 to 800 and 3 100. And Cloud Scale ASIC uses the latest Nexus 9000 switches have impressive specifications. However, total alternative revenue fell by 5% per year to 3.3 billion. Soft campus switching sales have been a factor, but competing hard data centers Arista Networks (ANET) and many other businesses rely on Broadcom switch chips and to some extent Cavium (CAVM).
Arista, backed by strong demand from cloud giants, saw revenue rise 34% last quarter to $ 328 million. Sales of the "white boxes" switches made by Asian contract manufacturers have also increased as cloud giants and other service providers able to invest in the resources needed to handle bulk purchases, often through the Design changes themselves. This is a problem that is becoming increasingly important because cloud companies represent an increasingly important part of IT spending.
And Arista and others have recently opened a new front in their battle against Cisco by launching switches (thanks to the packet processing chip from Broadcom Jericho) can handle many routing functions and thus simplify the network infrastructure. Arista expects to have 100 customers for its R Series R / Router range this summer.
Corporate white-box adoption is still in its infancy, but the trend could accelerate the adoption of third-party SDN platforms like VMware (VMW) NSX. NSX moves much of the intelligence of a network controller software, making it easy for a company that does not have the technical resources of a Google or Amazon switch products use. VMware announced in January that NSX is now at a rate of $ 1 billion. And on the support side, Google has recently announced that it will help mobile operators adopt SDN and other technologies that have been deployed in their data centers.
The availability of ACI on Nexus switches powered by Broadcom would put Cisco on a more competitive foot against its League rivals, especially among companies and operators who have Nexus equipment much cheaper. This could also improve Cisco's position with the cloud giants, but it is less secure given the investments that these companies have already introduced into their existing platforms.
In the long run, Cisco's interests could go further and allow the ACI to support third-party switches, because of the pressure on prices as white boxes vendors can exercise. Another option for the treatment of a heated competitive environment is to start authorizing its switching operating systems for use in third-party hardware, just like Arista.
For now, Cisco does not seem to plan anything drastically. In a statement on the CRN trading site, the company insists that "tight integration of hardware and software will continue to be network-based solutions we offer to our customers."
Given the billion-dollar gains that Cisco still reaping their commuting empire, you can not blame the company for choosing a measured response to SDN and white-box threats. But the company clearly represses how it is a very dynamic landscape, and the change of planning strategy that should be easily followed by others in the coming years.
Thursday, 2 March 2017
Are Investors Too Excited About Cisco Systems' Anemic Growth?
Shares of Cisco (NASDAQ: CSCO) recently reached a 16-year high after it beat second-quarter estimates at both levels. Despite this enthusiasm, the numbers of titles seemed anemic. Revenue fell 3 percent a year to $ 11.58 million, well above expectations of $ 30 million. Non-GAAP net income remained stable for one year at $ 2.9 billion, or $ 0.57 per share, which exceeded estimates still by one cent.
As a shareholder of Cisco, I was pleased to see the increase in fees. But it also made me wonder - Cisco deserved to go up to pre-bot dotcom levels? Or rally Cisco that feeds simply the demand for reliable dividend games with low ratings in a market with low interest rates? Let's take a closer look at the Cisco Revenue report to find out.
First, the good news ...
Cisco's security business unit was the fastest growing in recent quarters. The company's turnover increased 14% annually to $ 528 million, and deferred revenue - a key indicator of future demand - increased by 45%. Cisco attributes growth to strong demand for its advanced threat solutions, next-generation firewall and secure Internet gateway products.
Cisco's revenue collaboration also increased 4% to $ 1.06 billion, and deferred revenue increased 14%. This growth has been attributed to WebEx and Spark, the cloud-based business collaboration platform was launched in late 2015. However, the spark faces a stiff competition in the collaborative space of competing platforms.
Cisco's wireless products rose 3% to $ 632 million, boosted by the continued expansion of wireless infrastructure to satisfy hungry data customers, strong sales of its wave 11ac 2 (a new standard) Wi-Fi connection.
Cisco's total deferred revenue increased 13% year-on-year to $ 17.1 million, thanks to increased demand for software subscriptions and offers. This growth will gradually allow Cisco to swing away from its slower growing computer business. Cisco has also increased its three-cent dividend to $ 0.29 per share, which means a 3.4 percent profitability, marking its sixth consecutive increase in dividends. Finally, Cisco generated $ 12.3 billion of cash flow available in the last 12 months, which gives it a lot of capital to buy other companies in the fastest growing markets such as security, analysis and The Internet of things.
Now the bad news ...
The big problem for Cisco is that its security, collaboration and wireless generate only less than a fifth of its total volume. Nearly half of Cisco's revenue still comes from its switches and routers units, which are experiencing slow growth due to market saturation and commodification.
Cisco's switching products fell 5% per year to $ 3.31 billion during the quarter due to weak demand from campus customers, which was partially offset by increased demand for its ACI products. Routing revenue fell 10% to $ 1.82 billion, a growth in orders failed to offset the pressure on prices.
These declines indicate that rival cloud-based SDNs, such as Arista Networks (NYSE: ANET) - of which Cisco is trying to resolve the differences - are causing a paradigm shift that is detrimental to the market. Cloud-based networking solutions are more scalable and require less equipment in the hotel, such as routers and switches, that could transform Cisco's business upside down. Arista even claimed that the combination of their Jericho switches with their FlexRoute software can completely replace the cheaper SDN solution routers.
Sales of Cisco data centers also fell 7% to $ 790 million, due to the change in the "rack sheet" in which corporate customers prefer the smaller, cheaper and more scalable servers in servers Blade more powerful and more powerful.
Finally, Cisco's advice was mediocre at best. For the current quarter, it expects 2% growth in turnover with non-GAAP earnings of $ 0.57 to $ 0.59, which would be almost unchanged from previous year levels. Analysts expect their turnover to be 2% and profit increases
As a shareholder of Cisco, I was pleased to see the increase in fees. But it also made me wonder - Cisco deserved to go up to pre-bot dotcom levels? Or rally Cisco that feeds simply the demand for reliable dividend games with low ratings in a market with low interest rates? Let's take a closer look at the Cisco Revenue report to find out.
First, the good news ...
Cisco's security business unit was the fastest growing in recent quarters. The company's turnover increased 14% annually to $ 528 million, and deferred revenue - a key indicator of future demand - increased by 45%. Cisco attributes growth to strong demand for its advanced threat solutions, next-generation firewall and secure Internet gateway products.
Cisco's revenue collaboration also increased 4% to $ 1.06 billion, and deferred revenue increased 14%. This growth has been attributed to WebEx and Spark, the cloud-based business collaboration platform was launched in late 2015. However, the spark faces a stiff competition in the collaborative space of competing platforms.
Cisco's wireless products rose 3% to $ 632 million, boosted by the continued expansion of wireless infrastructure to satisfy hungry data customers, strong sales of its wave 11ac 2 (a new standard) Wi-Fi connection.
Cisco's total deferred revenue increased 13% year-on-year to $ 17.1 million, thanks to increased demand for software subscriptions and offers. This growth will gradually allow Cisco to swing away from its slower growing computer business. Cisco has also increased its three-cent dividend to $ 0.29 per share, which means a 3.4 percent profitability, marking its sixth consecutive increase in dividends. Finally, Cisco generated $ 12.3 billion of cash flow available in the last 12 months, which gives it a lot of capital to buy other companies in the fastest growing markets such as security, analysis and The Internet of things.
Now the bad news ...
The big problem for Cisco is that its security, collaboration and wireless generate only less than a fifth of its total volume. Nearly half of Cisco's revenue still comes from its switches and routers units, which are experiencing slow growth due to market saturation and commodification.
Cisco's switching products fell 5% per year to $ 3.31 billion during the quarter due to weak demand from campus customers, which was partially offset by increased demand for its ACI products. Routing revenue fell 10% to $ 1.82 billion, a growth in orders failed to offset the pressure on prices.
These declines indicate that rival cloud-based SDNs, such as Arista Networks (NYSE: ANET) - of which Cisco is trying to resolve the differences - are causing a paradigm shift that is detrimental to the market. Cloud-based networking solutions are more scalable and require less equipment in the hotel, such as routers and switches, that could transform Cisco's business upside down. Arista even claimed that the combination of their Jericho switches with their FlexRoute software can completely replace the cheaper SDN solution routers.
Sales of Cisco data centers also fell 7% to $ 790 million, due to the change in the "rack sheet" in which corporate customers prefer the smaller, cheaper and more scalable servers in servers Blade more powerful and more powerful.
Finally, Cisco's advice was mediocre at best. For the current quarter, it expects 2% growth in turnover with non-GAAP earnings of $ 0.57 to $ 0.59, which would be almost unchanged from previous year levels. Analysts expect their turnover to be 2% and profit increases
Subscribe to:
Posts (Atom)