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Tech prime Cisco Systems (CSCO - Free Report) cheered investors with first-quarter fiscal 2023 results. The networking giant beat on both earnings and revenues, and offered an encouraging revenue guidance for the current quarter. Cisco also raised its fiscal-year revenue outlook.
Cisco shares spiked as much as 5% at the close in after market hours. The smooth trading is likely to be felt in ETFs with the largest allocation going to this networking giant. These include iShares U.S. Telecommunications ETF (IYZ - Free Report) , iShares North American Tech-Multimedia Networking ETF , Pacer Data and Digital Revolution ETF (TRFK - Free Report) , First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report) and First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Cisco Earnings in Focus
Earnings of 86 cents per share outpaced the Zacks Consensus Estimate of 84 cents and improved 5% from the year-ago earnings. Revenues grew 6% year over year at $13.6 billion and edged past the consensus mark of $13.32 billion. The robust performance was driven by improvements in supply-chain issues and perhaps on China’s reopening (see: all the Technology ETFs here).
Cisco expects revenues to rise 4.5-6.5% in the fiscal second quarter and earnings of 84-86 cents per share. For fiscal 2023, revenues are expected to increase as much as 6.5%, up from the previous projection of 6% growth. Earnings per share are projected to be in the range of $3.49-$3.56.
Cisco announced a restructuring plan that will begin in the second quarter of fiscal 2023. The company said it would recognize pretax charges of about $600 million consisting of severance and other one-time termination benefits, real estate-related charges and other costs. Cisco expects to recognize about $300 million of the charges in the fiscal second quarter.
iShares U.S. Telecommunications ETF offers exposure to U.S. companies that provide telephone and Internet products, services and technologies. It follows the Russell 1000 Telecommunications RIC 22.5/45 Capped Index, holding 21 stocks in its basket. Cisco takes the top position at 17.3% of assets.
iShares U.S. Telecommunications ETF has AUM of $370.2 million and trades in an average daily volume of 1.3 million shares. IYZ charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares North American Tech-Multimedia Networking ETF
iShares North American Tech-Multimedia Networking ETF provides exposure to telecom equipment, data networking and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. iShares North American Tech-Multimedia Networking ETF holds 21 securities in its basket, with Cisco taking the fourth spot holding an 8.2% allocation.
iShares North American Tech-Multimedia Networking ETF has accumulated $116.1 million in its asset base and sees a light volume of around 14,000 shares a day. IGN charges 40 bps in annual fees and carries a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: 5 Tech ETFs At the Heart of Last Week's Rally).
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 83 stocks in its basket. Out of these, Cisco is the third firm, accounting for an 8.7% share. Semiconductors take the largest share at 29.1%, while system software and communication equipment round off the next two spots.
Pacer Data and Digital Revolution ETF debuted in the space in June and has accumulated $0.9 million in its asset base. It has an expense ratio of 0.60%. It trades in a meager volume of under 500 shares per day on average.
First Trust Nasdaq Cybersecurity ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors. The index includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers, and mobile devices to provide protection for the integrity of data and network operations. First Trust holds Nasdaq Cybersecurity ETF holds 37 stocks in its basket, with Cisco taking the third spot at 6.3%.
First Trust Nasdaq Cybersecurity ETF has accumulated $4.9 billion in its asset base. CIBR charges 60 bps in annual fees and trades in an average daily volume of about 575,000 shares.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 40 stocks in its basket, with Cisco occupying the third spot at 5.6% (read: Least-Hurt Top-Ranked Tech ETFs You May Consider Now).
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $4.1 billion and an average daily volume of around 697,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
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ETFs to Tap as Cisco Tops Fiscal Q1 Earnings
Tech prime Cisco Systems (CSCO - Free Report) cheered investors with first-quarter fiscal 2023 results. The networking giant beat on both earnings and revenues, and offered an encouraging revenue guidance for the current quarter. Cisco also raised its fiscal-year revenue outlook.
Cisco shares spiked as much as 5% at the close in after market hours. The smooth trading is likely to be felt in ETFs with the largest allocation going to this networking giant. These include iShares U.S. Telecommunications ETF (IYZ - Free Report) , iShares North American Tech-Multimedia Networking ETF , Pacer Data and Digital Revolution ETF (TRFK - Free Report) , First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report) and First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Cisco Earnings in Focus
Earnings of 86 cents per share outpaced the Zacks Consensus Estimate of 84 cents and improved 5% from the year-ago earnings. Revenues grew 6% year over year at $13.6 billion and edged past the consensus mark of $13.32 billion. The robust performance was driven by improvements in supply-chain issues and perhaps on China’s reopening (see: all the Technology ETFs here).
Cisco expects revenues to rise 4.5-6.5% in the fiscal second quarter and earnings of 84-86 cents per share. For fiscal 2023, revenues are expected to increase as much as 6.5%, up from the previous projection of 6% growth. Earnings per share are projected to be in the range of $3.49-$3.56.
Cisco announced a restructuring plan that will begin in the second quarter of fiscal 2023. The company said it would recognize pretax charges of about $600 million consisting of severance and other one-time termination benefits, real estate-related charges and other costs. Cisco expects to recognize about $300 million of the charges in the fiscal second quarter.
ETFs in Detail
iShares U.S. Telecommunications ETF (IYZ - Free Report)
iShares U.S. Telecommunications ETF offers exposure to U.S. companies that provide telephone and Internet products, services and technologies. It follows the Russell 1000 Telecommunications RIC 22.5/45 Capped Index, holding 21 stocks in its basket. Cisco takes the top position at 17.3% of assets.
iShares U.S. Telecommunications ETF has AUM of $370.2 million and trades in an average daily volume of 1.3 million shares. IYZ charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares North American Tech-Multimedia Networking ETF
iShares North American Tech-Multimedia Networking ETF provides exposure to telecom equipment, data networking and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. iShares North American Tech-Multimedia Networking ETF holds 21 securities in its basket, with Cisco taking the fourth spot holding an 8.2% allocation.
iShares North American Tech-Multimedia Networking ETF has accumulated $116.1 million in its asset base and sees a light volume of around 14,000 shares a day. IGN charges 40 bps in annual fees and carries a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: 5 Tech ETFs At the Heart of Last Week's Rally).
Pacer Data and Digital Revolution ETF (TRFK - Free Report)
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 83 stocks in its basket. Out of these, Cisco is the third firm, accounting for an 8.7% share. Semiconductors take the largest share at 29.1%, while system software and communication equipment round off the next two spots.
Pacer Data and Digital Revolution ETF debuted in the space in June and has accumulated $0.9 million in its asset base. It has an expense ratio of 0.60%. It trades in a meager volume of under 500 shares per day on average.
First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report)
First Trust Nasdaq Cybersecurity ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors. The index includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers, and mobile devices to provide protection for the integrity of data and network operations. First Trust holds Nasdaq Cybersecurity ETF holds 37 stocks in its basket, with Cisco taking the third spot at 6.3%.
First Trust Nasdaq Cybersecurity ETF has accumulated $4.9 billion in its asset base. CIBR charges 60 bps in annual fees and trades in an average daily volume of about 575,000 shares.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 40 stocks in its basket, with Cisco occupying the third spot at 5.6% (read: Least-Hurt Top-Ranked Tech ETFs You May Consider Now).
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $4.1 billion and an average daily volume of around 697,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.