Cisco Systems: Ready to Bounce Back or Still Refocusing?
Cisco Systems Inc. is set to announce fiscal Q4 earnings later today (Aug. 10). The VAR Guy wonders: Will CEO John Chambers (pictured) suggest that Cisco is now ready for a rebound … or will it require far more time for Cisco’s recent channel adjustments to generate sales and profit momentum?
The VAR Guy has already raised six key questions that Chambers needs to answer. They range from margins and market share to Cisco’s overall talent pool. Cisco’s stock is trading near a 52-week low — though many tech stocks have been riding a Wall Street roller coaster in recent weeks.
In response, Cisco is cutting about 6,500 employees this month. Analysts expect Cisco’s Q4 2011 net income to drop about 16 percent from Q4 2010. Analysts also expect Q4 2011 revenues to grow about 1.2 percent to $10.97 billion. The VAR Guy fetched those stats from Yahoo Finance, which leverage content from Xignite Financials and Wall Street Cheat Sheet.
Year after year, Chambers has maintained that Cisco is a pro-active company that catches market inflection points and rides new IT waves. Chambers reiterated that stance during Cisco Partner Summit 2011 (Feb. 28-March 3). But since that time, Cisco has seemed to be in reaction mode — offering a voluntary early retirement package, killing some products and cutting roughly 6,500 employees (those cuts are expected to be completed this month).
So what is the current state of Cisco … right now? At least one Wall Street analyst sees potential upside ahead of today’s earnings call, reports Barron’s. The VAR Guy will return with fresh perspectives following Cisco’s earnings call later today.