Cisco’s Woes Seem Never-Ending

Data networking equipment company Cisco Systems, Inc. (CSCO) has reportedly lost a lawsuit challenging Microsoft Corporation (MSFT)’s acquisition of Skype, a freemium video, voice and text messaging provider.

Cisco, along with Skype's rival Messagenet S.p.A., had filed the suit on concerns that Microsoft’s acquisition of Skype would create a monopoly and harm competition. However, a judge has rejected Cisco’s plea, saying that the acquisition is compatible with the laws governing the European Union's internal markets and cannot be said to be restricting competition.

Cisco, which sells expensive video and teleconferencing equipment, understandably feels vulnerable from free services that threaten its businesses. It has been pushing for a common set of technology standards in video conferencing.

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Headwinds in Emerging Markets; Cisco Guides Lower

Cisco Systems, Inc. (CSCO), the leading provider of data networking equipment, disappointed investors with a relatively poor start to fiscal year (FY) 2014 when it announced its earnings on November 13. Lower than expected guidance for the next quarter caused its share price to plunge about 12.5% to $20.97 when trading opened, the day after the earnings release. Cisco reported revenues of $12.09 billion, which missed consensus estimates by 2.1% but were 1.8% higher compared to the same period last year. Revenues suffered mainly due to weak performance by the Service Provider Video segment and declining orders from emerging markets.
Earnings per share (EPS) came out to $0.53, beating estimates by two cents, 10% higher year-over-year (YoY) while gross margins of 63% were higher than consensus estimates of 61%-62%. The company’s financial results are similar to that of International Business Machines Corporation (IBM), which also missed top line estimates due to lackluster performance in emerging markets but beat EPS estimates.
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Cisco Systems Company Description

Cisco Systems, Inc. (CSCO), the leader in data networking equipment, designs, manufactures and sells networking and communication products which transmit data, voice and video. The company’s products fall under a few business segments, namely Switching, NGN Routing, Services, Data Center, Wireless, Collaboration, Service Provider Video, and Others. Cisco earns 31% of its revenues from Switches, 22% from Services, and 18% from Routers.  Read More: CSCO

Cisco Systems, Inc. (CSCO) Software-Centric Evolution Key

Cisco Systems, Inc. (NASDAQ:CSCO) has been given an Outperform rating with a price target of $30 by Raymond James analysts Simon Leopold, Georgios Kyriakopoulos and Victor Chiu. The analysts are “constructive on Cisco’s vision and focus on the software-centric evolution.” Cisco is now evolving towards more software-centric networks and plans to double the revenues from software services to $12 billion over the next 3-5 years from $6 billion in 2012.

According to analysts, the overall effect of the “disruptive software transition” on Cisco’s gross income dollars is hard to determine, as of now, but they believe the trend “represents a revenue growth headwind but a tailwind for gross margin.”  Read more.

Cisco Systems, Inc. (CSCO) Q1 FY 2014 Earnings Preview: November Quarter Rewards

Cisco Systems, Inc. (CSCO) has scheduled a conference call for Wednesday, November 13, 2013, at 1:30 PM (PT) to announce its first quarter fiscal year 2014 financial results for the period ending Saturday, October 26.

Wall Street anticipates that the networking & communication devices maker earn $0.51 per share for the quarter. iStock expects CSCO to beat Wall Street's consensus number by a penny. The iEstimate is $0.52.

With the help of more than 75,000 employees, Cisco Systems designs, manufactures and sells Internet protocol (IP) and other products related to the communications and information technology industry worldwide. Read more.

The Dividend Boom Is Far From Over For These 4 Stocks

Cisco Systems (Nasdaq: CSCO) -- Sometimes looked on as a klutzy has-been that can't seem to get out of its way, Cisco is a classic sleeper that offers investors loads of value. The longtime leader of technological connectivity has raised its dividend 21% this year alone.

The company sits on a $50 billion cash pile, trades at about $23 a share with a forward price-to-earnings (P/E) ratio of 11, and has a dividend payout ratio of 33% and a dividend yield of 2.9%. Read more.

Cisco buys out start up Insieme

Network equipment maker Cisco Systems Inc, looking to protect its core business from new competition, has bought out the remainder of its majority owned data center technology start-up, Insieme, in a deal that could cost up to $863 million.

Cisco, which already owned 85 percent of Insieme, said it closed the deal with its employees, and the final price would be tied to sales targets for which it did not reveal details.It also unveiled Insieme's first products, which are Cisco's answer to software defined networking (SDN) technology, a growing trend among its rivals in developing software with features that are typically found in high-end network hardware.

Because SDN technology can run on cheaper hardware than Cisco's expensive routers and switches, the network hardware leader had to find a way to protect its equipment sales. Read more.