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What to Expect Ahead of Cisco's (CSCO) Q4 Earnings Release?
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Cisco Systems, Inc. (CSCO - Free Report) is scheduled to release fourth-quarter fiscal 2021 results on Aug 18.
The company anticipates fourth-quarter fiscal 2021 revenues to improve in the range of 6-8% on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $13.04 billion, indicating an increase of almost 7.3% over the year-ago quarter’s reported figure.
Non-GAAP earnings are anticipated between 81 cents and 83 cents per share. The Zacks Consensus Estimate for earnings has been stable in the past seven days at 83 cents per share. The figure suggests growth of 3.8% from the prior-year quarter’s levels.
Strength in Cisco’s extensive product portfolio as well as robust adoption of the company’s subscription-based offerings is expected to have positively contributed to the top line in fiscal fourth quarter.
Cisco’s revenues are likely to have benefitted from momentum in web security, identity and access, advanced threat and unified threat management security solutions, owing to higher cybersecurity spend on the back of continued work from home set up globally.
Solid uptake of SecureX offering — a comprehensive cloud-based security platform to strengthen enterprise security infrastructure — might have contributed to the to-be-reported quarter’s performance. In fiscal third quarter, management noted that the solution was being leveraged by more than 7,000 customers since its availability in June 2020.
Incremental adoption of Secure Remote Worker, which leverages Zero Trust Architecture along with solid uptick in cloud-based solutions, including Duo and Umbrella, augurs well.
Continued momentum in Cisco’s video conferencing application — Webex platform — triggered by coronavirus-induced work-from-home wave and accelerated implementation of hybrid work model, is expected to have contributed to fiscal fourth-quarter performance.
In the quarter under review, Cisco rolled out several new features, refurbished logo and identity of Webex. Cisco integrated the offerings from the acquisition of Slido and Socio Labs and added new features like My Voice Only (available from August 2021) and People Focus to Webex.
Strength in the company’s Catalyst 9000 and Nexus 9000 switch solutions is likely to have driven revenue growth for the company’s Infrastructure Platforms segment. Accelerated deployment of 5G and growing adoption of Wi-Fi 6 products and higher demand for Meraki solutions may have acted as tailwinds.
Weak demand for servers along with coronavirus crisis-led supply chain constraints are likely to have acted as headwind in fiscal fourth quarter. Increasing investments on portfolio expansion, product enhancements and acquisitions amid stiff competition from Arista (ANET - Free Report) and Juniper in networking infrastructure market and Zoom Video (ZM - Free Report) in the enterprise communications domain might have hindered margin expansion in fiscal fourth quarter.
Non-GAAP gross margin is expected to be 64-65%, while the reported figure in fiscal third quarter was 66%.
Key Developments in Q4
In July 2021, Cisco concluded the acquisition of event management platform — Socio Labs — for an undisclosed amount. U.S-based Socio Labs’ event technology platform assists organizers to conduct virtual, in-person as well as hybrid events with varying size of attendees and in different formats.
In Jun 2021, Cisco completed the buyout of Kenna Security, a privately-held company specializing in risk-based vulnerability management.
Prior to that, Cisco also inked collaboration with wireless service provider, AT&T to get Webex Calling with AT&T – Enterprise on to its Unified Communications Manager Cloud (UCMC) platform.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Cisco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Cisco has an Earnings ESP of +1.82% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stock that Warrants a Look
Here is a stock worth keeping a tab on, as our model shows that this too has the right combination of elements to beat on earnings this reporting cycle:
Image: Bigstock
What to Expect Ahead of Cisco's (CSCO) Q4 Earnings Release?
Cisco Systems, Inc. (CSCO - Free Report) is scheduled to release fourth-quarter fiscal 2021 results on Aug 18.
The company anticipates fourth-quarter fiscal 2021 revenues to improve in the range of 6-8% on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $13.04 billion, indicating an increase of almost 7.3% over the year-ago quarter’s reported figure.
Non-GAAP earnings are anticipated between 81 cents and 83 cents per share. The Zacks Consensus Estimate for earnings has been stable in the past seven days at 83 cents per share. The figure suggests growth of 3.8% from the prior-year quarter’s levels.
Cisco Systems, Inc. Price and EPS Surprise
Cisco Systems, Inc. price-eps-surprise | Cisco Systems, Inc. Quote
Factors Likely to Have Influenced Q4 Results
Strength in Cisco’s extensive product portfolio as well as robust adoption of the company’s subscription-based offerings is expected to have positively contributed to the top line in fiscal fourth quarter.
Cisco’s revenues are likely to have benefitted from momentum in web security, identity and access, advanced threat and unified threat management security solutions, owing to higher cybersecurity spend on the back of continued work from home set up globally.
Solid uptake of SecureX offering — a comprehensive cloud-based security platform to strengthen enterprise security infrastructure — might have contributed to the to-be-reported quarter’s performance. In fiscal third quarter, management noted that the solution was being leveraged by more than 7,000 customers since its availability in June 2020.
Incremental adoption of Secure Remote Worker, which leverages Zero Trust Architecture along with solid uptick in cloud-based solutions, including Duo and Umbrella, augurs well.
Continued momentum in Cisco’s video conferencing application — Webex platform — triggered by coronavirus-induced work-from-home wave and accelerated implementation of hybrid work model, is expected to have contributed to fiscal fourth-quarter performance.
In the quarter under review, Cisco rolled out several new features, refurbished logo and identity of Webex. Cisco integrated the offerings from the acquisition of Slido and Socio Labs and added new features like My Voice Only (available from August 2021) and People Focus to Webex.
Strength in the company’s Catalyst 9000 and Nexus 9000 switch solutions is likely to have driven revenue growth for the company’s Infrastructure Platforms segment. Accelerated deployment of 5G and growing adoption of Wi-Fi 6 products and higher demand for Meraki solutions may have acted as tailwinds.
Weak demand for servers along with coronavirus crisis-led supply chain constraints are likely to have acted as headwind in fiscal fourth quarter.
Increasing investments on portfolio expansion, product enhancements and acquisitions amid stiff competition from Arista (ANET - Free Report) and Juniper in networking infrastructure market and Zoom Video (ZM - Free Report) in the enterprise communications domain might have hindered margin expansion in fiscal fourth quarter.
Non-GAAP gross margin is expected to be 64-65%, while the reported figure in fiscal third quarter was 66%.
Key Developments in Q4
In July 2021, Cisco concluded the acquisition of event management platform — Socio Labs — for an undisclosed amount. U.S-based Socio Labs’ event technology platform assists organizers to conduct virtual, in-person as well as hybrid events with varying size of attendees and in different formats.
In Jun 2021, Cisco completed the buyout of Kenna Security, a privately-held company specializing in risk-based vulnerability management.
Prior to that, Cisco also inked collaboration with wireless service provider, AT&T to get Webex Calling with AT&T – Enterprise on to its Unified Communications Manager Cloud (UCMC) platform.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Cisco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Cisco has an Earnings ESP of +1.82% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stock that Warrants a Look
Here is a stock worth keeping a tab on, as our model shows that this too has the right combination of elements to beat on earnings this reporting cycle:
Agilent Technologies (A - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.