Is Cisco Systems (CSCO) management following the Carl Icahn plan? It may be looking at what the famous hedge-fund raider has been up to at Apple (AAPL), as he has called for more share buybacks and dividends. Cisco announced last night that it will increase its dividend by 12%, or two cents per share, now paying out a yield of 3.3.%. It also continue to scarf up it's own stock, having repurchased $4 billion worth of stock -- or 185 million shares -- in the quarter.

The dividend boost and large buyback came as a surprise. But it all makes sense, as what else is Cisco to do? Growth has dried up. With cash piling up on the balance sheet and it's growth prospects cloudy for the next year, Cisco is trying to keep shareholders happy by directing its cash toward a dividend and buybacks. Perhaps Cisco CEO John Chambers feels Captain Carl may prey on him next

Cisco reported second quarter of fiscal year 2014 sales of $11.16 billion, close to consensus estimates. It reported earnings per share of $0.47, exceeding $0.46 consenus estimate by a penny, aided by lower expenses and a lower share count, helped by the buyback.

Yet despite these okay numbers, Cisco shares are trading down about 4% today, last trading hands around $22. 

This entry was posted on Thursday, February 13, 2014 at 17:04 pm and is filed under Infrastructure & SDN, Investing.
Keywords: Cisco Systems, Earnings, SDN, Enterprise Technology, Newtorking

Shares of optical networking equipment maker Infinera (INFN) have enjoyed a wild ride of late, first collapsing on the speculation that it had lost big 100G optical contract with Verizon to a competitor -- but then bouncing back with a fury today, rising 30 percent after reporting earnings.

Infinera confirmed on yesterday's conference call that it lost the Verizon deal, but it turned out not to matter much anyway. Given the recent downer news on Verizon, investors had been running scared and they were caught off-guard by a suprisingly upbeat report that reversed nearly all of the loss since the Verizon news, broken by anlyst Jefferies analyst George Notter, circulated over the last few weeks. 

This entry was posted on Thursday, January 30, 2014 at 21:01 pm and is filed under .
Keywords: Infinera, Optical Networking, Verizon, Earnings, Alcatel-Lucent

Something on Cisco's earnings call last night went terribly wrong. In a rational business sense, Cisco made plenty of money, even though they missed analyst estimates: $1.9B in profit and $40 billion in revenue for the first time in the company's history really isn't that shabby.

But something else was going on. The conference call was awful. It did not inspire confidence. Cisco executives bungled words, proceeded with a new "four-part" format as if they were trying to choreograph an opera at the Met, and struggled to explain the business climate. Even John Chambers himself, master of the bullish technology catchphrase, seemed to have trouble elucidating exactly what the problem was.

"We think the words unusual uncertainty are ... a description of what's happening."

Whaaa? Had we been suddenly been dropped into some metaphysical California Yoga retreat? Unusual uncertainty? What is that? That's not the Chambers I know. That's downright whimpy.

This entry was posted on Thursday, August 12, 2010 at 00:36 am and is filed under .
Keywords: Cisco, John Chambers, Earnings

Cisco shares are getting hammered nearly 6% after hours after the company missed targets set by analysts.

The company said in a release that it earned $1.9 billion, or 33 cents per share, in the fiscal fourth quarter that ended July 31. That is an increase of $1.1 billion, or 19 cents per share, over a year ago. But analysts had expected 42 cents in earnings. Overall revenue grow to a record $40 billion.

That's a big miss, especially for Cisco, a company that often beats estimates. Given that it's a technology bellwether and often looked to for guidance on the economy as a whole, it will likely add to pressure on the general market tomorrow.

This entry was posted on Wednesday, August 11, 2010 at 16:25 pm and is filed under Technology, Macro.
Keywords: Cisco, Earnings, Routers

Tech earnings reports are rolling in like Budeweisers in a NASCAR infield, and we've got it covered. What's striking is the range of results, from earnings bombs like Netflix, and Amazon, to solid efforts from blue chips Apple and Microsoft.

Here's our recap of the Winners and Losers of earnings season:

This entry was posted on Friday, July 23, 2010 at 10:37 am and is filed under Media, Mobile, Technology.
Keywords: Amazon, Apple, Microsoft, Adtran, Calix, Yahoo, Netflix, Earnings

Just when you thought Goldman was a rigged, unstoppable money-printing machine, the bank's profits fell 86% in the first quarter of 2010, missing estimates badly, as it settles with the U.S. government for a half-a-billion-dollar fine.

Did you really think Goldman was that good? Or did you think they were just a bunch of proprietary traders playing with free government money. It would be interesting to see what Goldman's profits would be if they had to borrow at 4% like the rest of us, instead of the 0% gift from the U.S.A.

In other news:

This entry was posted on Tuesday, July 20, 2010 at 10:53 am and is filed under Technology, Macro.
Keywords: BP, Gulf Oil Spill, Goldman Sachs, Earnings,

One of the themes we've been following here is the buildout in more telecom connectivity -- whether it be Ethernet connections or all those data connections to mobile-phone towers -- and Adtran's earnings appear to bear that out.

The Alabama-based networking and telecom equipment company handily beat analyst estimates, announcing quarterly Earnings Per Share (EPS) of .44, whereas consensus expecations were for .35. The stock was trading up 7% -- about $2 -- to $30.90 in midday trading.

This entry was posted on Wednesday, July 14, 2010 at 13:09 pm and is filed under Mobile, Technology.
Keywords: Adtran, Earnings, 3G, Ethernet, Telecom
Gilead Sciences (GILD) share got clobbered today, trading down 10% at midday, after the company lowered its 2010 sales forecast to a range of $7.4-$7.5B from $7.6-$7.8B citing recently enacted healthcare legislation. Net income for the quarter ended March 31 jumped from $854.9M or $0.92/sh. compared with $589.1M or $0.63/sh. in the Year ago period. Gilead’s first-quarter sales increased 24% to $1.79B primarily due to strong sales of its antiviral drugs to treat HIV-related conditions. CFO Robin Washington said the decrease reflects the impact of recently passed U.S. healthcare legislation which would have an sales impact of $200M and an earnings impact of $0.15 sh. in 2010 primarily in the HIV business. Sales of its HIV drug Atripla increased 36% to $692 M for Q1 compared to analysts’ estimate of $726M. Royalties from Roche sales of Tamiflu were $246.3M from increased sales related to the influenza pandemic. The healthcare reform impact would be  related to pricing of antiretroviral sales in the use from Medicaid and Medicare Part D. However, no 2011 guidance was given due to the fact that the bill was passed only on March 23. There are also pricing pressures in Europe.
This entry was posted on Wednesday, April 21, 2010 at 19:59 pm and is filed under Biotech.
Keywords: Abbott, Earnings, Gilead, Healthcare Bill
It gets to the point where you wonder of maybe Apple will make enough money that they can help us bail out the U.S. government. Apple announced earnings last night, and it was a barn-burner of a quarter, with the company thrashing earnings per share (EPS) estimates by almost $1.00. Shares look like they will open about 6% higher, blowing through the $250 mark. The company announced earnings per share EPS of $3.33, beating consensus estimates of $2.45.  Revenue was $13.5 billion vs. $12.04 billion consensus estimates, and a 49% increase over the prior March quarter’s results. Most notably, the company is showing strong growth in its core Mac computer growth, which may demonstrate that as it launches newer products such as the iPhone and the iPad, that's adding strength to the overall franchise. Mac sales were up 33% from the prior year. "This very strong performance was due primarily to the more than doubling of iPhone sales and the strong momentum of our Mac products," said Apple CFO Peter Oppenheimer on the conference call. Some other quick facts from the call:
  • Oppenheimer pointed out that they company printed a much smaller sequential revenue decline from the December to March quarters than they normally experience after the falloff from the holiday season, which demonstrates how strong the quarter was.
  • Operating margin was $4 billion representing 29.5% of revenue. Net income of $3.1 billion was up 90% over the year-ago quarter.
  • Apple sold 2.94 million Macs, a record for the March quarter. This represents 33% year-over-year growth.
  • Sold 10.9 million iPods, about equal to the 11 million sold in the year-ago quarter. "iPod Touch continued to be very strong with units growing 63% year-over-year."
  • Sales of $1.1 billion for the iTunes store.  In February the store crossed the 10 billion mark for songs purchased and downloaded.
  • 8.75 million iPhones sold during the quarter, an all-time high exceeding the previous record set in the December quarter.
  • The company now holds cash plus short-term and long-term marketable securities totaling $41.7 billion at the end of the March quarter compared to $39.8 billion at the end of the December quarter, an increase of $1.9 billion. Cash flow from operations was over $2.3 billion.
  • Forecast for revenue on the June quarter: between $13-13.4 billion compared to $9.7 billion in the June quarter last year. Company said it expects the gross margin to come down to 36%  from 41.7% in the March quarter reflecting increased stock-based compensation expense.
This entry was posted on Wednesday, April 21, 2010 at 13:12 pm and is filed under Mobile, Technology.
Keywords: Apple, Earnings, iPod, iTunes, Mac
Bloomberg is out with a story saying the that a divergence is emerging between what companies are predicting will happen to their earnings (they will go up) and what Wall Street analysts think will happen to earnings (they will go down). This historically indicates the stock market rally can continue. Ten percent of companies raised their earnings forecasts this quarter, while 4.1 percent lowered them, says Bloomberg, which cites historical data from Bespoke Investment Group indicating that's the widest spread on record. What's interesting is that stock analysts are still so skeptical of corporate profits in 2010, even though companies are telling them they'll earn more. From the Bloomberg story:
The divergence may force Wall Street firms to increase estimates later this year, a bullish signal after the largest monthly drop for equities since February 2009. The last time companies were raising forecasts at a comparable rate while analysts reined them in was the start of 2004, when the S&P 500 gained 9 percent. “Wall Street analysts are still very gun-shy of predicting a real recovery in earnings,” said David Kelly, who helps oversee $480 billion as chief market strategist for JPMorgan Funds in New York. “It tells us the stock market is cheap. The chances of companies beating estimates are extremely high.”
So do Wall Street analysts know something that the companies don't know, or are they just out to lunch? My bet, based on historical experience, is the latter.
This entry was posted on Tuesday, February 16, 2010 at 20:41 pm and is filed under Macro.
Keywords: Analysts, Bespoke, Bloomberg, Earnings, Markets