Cisco Earnings Preview Q1


Cisco Earnings Preview Q1
cisco headquarters csco

Cisco (NASDAQ: CSCO) will report earnings after market close on Wednesday, November 12th.

The company hopes to start off it’s Fiscal 2015 right after a disappointing FY 2014 saw sales decline 3%.  Investors will monitor gross margins which were at 61% in FY 2013.

Challenges

Emerging Markets

While the company should be benefiting from raising bandwidth use in emerging markets, it has seen difficulties and declined demand in emerging markets. Investors will hope to see some stabilization in the global market including key emerging markets. The exposure of the NSA leak and connections to backdoors Cisco hardware has not helped globally as many US wary countries have seeked alternative vendors.

Software based Network

Software-Defined Network or SDN, allows switching to run on inexpensive servers or even cheaper cloud services is threatening a business that had some of the best margins for Cisco. Investors will continue to montior the situation as switching consisted of 41.9% of total revenue in the quarter ended July.

Wall Street Expectations

Analysts are expecting the company to earn 53 cents flat from a profit of 53 cents in the same period year ago. Revenue is expected expected to be at ~$12.2 billion up from ~$12.1 billion.

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