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Cisco's Earnings Beat, Guidance Disappoints: ETFs in Focus
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Tech prime Cisco Systems (CSCO - Free Report) failed to cheer investors following fourth-quarter fiscal 2021 results. Though the networking giant beat on both earnings and revenues, it offered downbeat revenue guidance for the ongoing quarter.
Earnings of 84 cents per share outpaced the Zacks Consensus Estimate by a penny and improved 5% from the year-ago earnings. Revenues grew 8% year over year to $13.12 billion and surpassed the consensus mark of $13.04 billion. Robust results were driven by the remote working trend, which boosted demand for the company's video conferencing platform Webex, virtual private network AnyConnect and cybersecurity products (see: all the Technology ETFs here).
Cisco expects revenues to increase 7.5-9.5% year over year, and earnings per share in the range of 79-81 cents for first-quarter fiscal 2022. The Zacks Consensus Estimate for earnings per share is 81 cents while the same for revenues indicates growth of 7.8%. The company warns that supply chain issues would continue to drive up component costs and delivery backlogs in the ongoing quarter.
Following the earnings, Cisco shares dipped 1.6% in aftermarket trade. The stock currently has a Zacks Rank #3 (Hold) and a VGM Score of C.
ETFs to Watch
Given this, ETFs with the largest allocation to this network giant are in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises or avoid it if the stock slides. Below, we have highlighted five of them:
This fund follows the Dow Jones U.S. Select Telecommunications Index and offers exposure to 44 American companies that provide telephone and Internet products, services and technologies. Cisco occupies the top position with 23.4% of the assets. The ETF has AUM of $452.6 million and trades in an average daily volume of 169,000 shares. It charges 42 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: How Will Telecom ETFs React to Mixed Q2 Earnings?).
iShares North American Tech-Multimedia Networking ETF
This ETF provides exposure to telecom equipment, data networking, and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. Holding 22 securities in its basket, Cisco takes the third spot with 9.1% allocation. The product has accumulated $106.7 million in its asset base and is seeing a moderate volume of around 4,000 shares a day. It charges 43 bps in annual fees and carries a Zacks ETF Rank #3 with a High risk outlook.
This 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. It has accumulated $4.4 billion in its asset base. The fund charges 60 bps in annual fees and trades in an average daily volume of about 572,000 shares. In total, the product holds 39 stocks in its basket with Cisco taking the third spot at 6% (read: Q2 Earnings Fails to Impress Cybersecurity ETFs).
This actively managed ETF debuted last month and has attracted $15.9 million in its asset base. It offers exposure to quality companies with capital discipline and lower market volatility. Holding 31 stocks in its basket, Cisco is the top firm making up for 5.1% of assets. The fund charges 89 bps in annual basis and trades in average daily volume of 34,000.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
This ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with Cisco occupying the sixth position accounting for 5.1% allocation. DJD has been able to manage assets worth $169.4 million, while trading in volume of 25,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3.
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Cisco's Earnings Beat, Guidance Disappoints: ETFs in Focus
Tech prime Cisco Systems (CSCO - Free Report) failed to cheer investors following fourth-quarter fiscal 2021 results. Though the networking giant beat on both earnings and revenues, it offered downbeat revenue guidance for the ongoing quarter.
Earnings of 84 cents per share outpaced the Zacks Consensus Estimate by a penny and improved 5% from the year-ago earnings. Revenues grew 8% year over year to $13.12 billion and surpassed the consensus mark of $13.04 billion. Robust results were driven by the remote working trend, which boosted demand for the company's video conferencing platform Webex, virtual private network AnyConnect and cybersecurity products (see: all the Technology ETFs here).
Cisco expects revenues to increase 7.5-9.5% year over year, and earnings per share in the range of 79-81 cents for first-quarter fiscal 2022. The Zacks Consensus Estimate for earnings per share is 81 cents while the same for revenues indicates growth of 7.8%. The company warns that supply chain issues would continue to drive up component costs and delivery backlogs in the ongoing quarter.
Following the earnings, Cisco shares dipped 1.6% in aftermarket trade. The stock currently has a Zacks Rank #3 (Hold) and a VGM Score of C.
ETFs to Watch
Given this, ETFs with the largest allocation to this network giant are in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises or avoid it if the stock slides. Below, we have highlighted five of them:
iShares U.S. Telecommunications ETF (IYZ - Free Report)
This fund follows the Dow Jones U.S. Select Telecommunications Index and offers exposure to 44 American companies that provide telephone and Internet products, services and technologies. Cisco occupies the top position with 23.4% of the assets. The ETF has AUM of $452.6 million and trades in an average daily volume of 169,000 shares. It charges 42 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: How Will Telecom ETFs React to Mixed Q2 Earnings?).
iShares North American Tech-Multimedia Networking ETF
This ETF provides exposure to telecom equipment, data networking, and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. Holding 22 securities in its basket, Cisco takes the third spot with 9.1% allocation. The product has accumulated $106.7 million in its asset base and is seeing a moderate volume of around 4,000 shares a day. It charges 43 bps in annual fees and carries a Zacks ETF Rank #3 with a High risk outlook.
First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report)
This 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. It has accumulated $4.4 billion in its asset base. The fund charges 60 bps in annual fees and trades in an average daily volume of about 572,000 shares. In total, the product holds 39 stocks in its basket with Cisco taking the third spot at 6% (read: Q2 Earnings Fails to Impress Cybersecurity ETFs).
Formidable Fortress ETF (KONG - Free Report)
This actively managed ETF debuted last month and has attracted $15.9 million in its asset base. It offers exposure to quality companies with capital discipline and lower market volatility. Holding 31 stocks in its basket, Cisco is the top firm making up for 5.1% of assets. The fund charges 89 bps in annual basis and trades in average daily volume of 34,000.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
This ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with Cisco occupying the sixth position accounting for 5.1% allocation. DJD has been able to manage assets worth $169.4 million, while trading in volume of 25,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3.