Needham & Company Remains Sidelined on Cisco Systems (CSCO) Following 4Q and Guide Down

Needham & Company reiterated a Hold rating on Cisco Systems (NASDAQ: CSCO) following the company's 4Q earnings report. Cisco noted a 6% decline in Service Provider orders and stated on the call they had little visibility in this sector. Guidance of down 1% to up 1% pro-forma for the revenues implies revenues of between $12,298-12,394MM below prior revenue forecasts of $12,546MM for the October quarter.

Analyst Alex Henderson commented, "Cisco reports a respectable quarter but offers a soft guide on concerns about Service Provider and Emerging Markets. Enterprise and Commercial orders were solid. We are slightly trimming revenues and maintaining our EPS despite a 7% reduction in force at a cost of $700MM. Call us old school, but shouldn’t a company cutting 7% of its staff see some benefit to EPS? Cisco announced it is cutting 5,500 positions and “reinvesting” the benefits into its business. This is at a cost of $700 million."

For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.

Shares of Cisco closed at $30.72 yesterday.

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