Cisco (CSCO) To Report Q218 Earnings: What's In The Cards?
Zacks Investment Research | Feb 12, 2018 03:55AM ET
Cisco Systems Inc. (NASDAQ:CSCO) is set to release second-quarter fiscal 2018 earnings on Feb 14. The company beat the Zacks Consensus Estimate in three of the trailing four quarters with an average positive surprise of 1.73%.
In the last quarter, the company reported non-GAAP earnings of 61 cents per share, beating the Zacks Consensus Estimate by a penny. However, the figure remained unchanged on a year-over-year basis.
Cisco missed the Zacks Consensus Estimate for revenues in three of the trailing four quarters. Revenues declined 1.7% year over year in the first quarter to $12.14 billion and were almost in line with the Zacks Consensus Estimate. The decline was due to the transition to subscription-based model.
Guidance & Estimates
For second-quarter fiscal 2018, revenues are expected to increase in the range of 1-3% on a year-over-year basis. Non-GAAP earnings are anticipated between 58 and 60 cents per share. The Zacks Consensus Estimate for earnings is pegged at 58 cents, while that for revenues stands at $11.73 billion.
Gross margin is expected in the range of 62.5-63.5%, while operating margin is anticipated between 29.5% and 30.5% for the quarter.
Cisco’s stock has returned 26.9% in the last year, outperforming the 10.1% rally of the industry .
Let’s see how things are shaping up for this announcement.
Collaborations to Drive Growth
Cisco’s extended partnerships with the likes of Apple (NASDAQ:AAPL), IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT) are likely to boost growth, particularly in the cloud and IoT.
During the quarter, the company witnessed enhanced product adoption. The majority of the companies including the likes of Ameritas and Orange selected Cisco to improve IT security, and enhance work processes and automation.
The company also announced various product innovations and partnership programs during the quarter. With emphasis on multicloud, the company announced its HyperFlex platform as well as its Container Platform, which is expected to further expand its product portfolio. The company is also reportedly working on a hyperconnected car in collaboration with Hyundai, which will help it in penetrating the smart-vehicle solutions market.
Cisco also joined forces with Apple, Aon and Allianz (DE:ALVG) to provider better cyber risk management solutions for business, the effect of which is likely to be seen in the quarter to be reported.
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