William Blair Reiterates Outperform on Cisco Systems (CSCO) Following Solid 4Q Results
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William Blair reiterated an Outperform rating on Cisco Systems (NASDAQ: CSCO) following the company's 4Q earnings report. CSCO reported a $67 million revenue beat compared to consensus. EPS beat estimates by $0.03. Strength in the quarter was led by security, data center switching, collaboration, wireless, and services, and partly offset by declines in routing and data center.
Analyst Jason Ader commented, "Cisco delivered a solid fiscal fourth quarter in a volatile macro environment, topping the Street on top and bottom lines, but guidance was disappointing— $191 million below consensus on revenue and $0.01 below consensus on non-GAAP EPS. The main culprit was a slowdown in orders in service provider and emerging markets, which had rebounded recently but have now reverted to year-over-year declines. We suspect the 7% workforce reduction announced on the call is in part due to a diminished demand outlook, though we recognize that it is also part of CEO Chuck Robbins’ plan to shift resources to areas of the business with better relative growth prospects."
Shares of Cisco closed at $30.72 yesterday.
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