Back to top

Image: Bigstock

Factors to Consider Ahead of Cisco's (CSCO) Q3 Earnings

Read MoreHide Full Article

Cisco Systems (CSCO - Free Report) is set to report third-quarter fiscal 2019 earnings on May 15.

Cisco’s third-quarter results are likely to benefit from strength in the company’s security, Infrastructure Platforms and applications segments. Strengthening collaboration portfolio, which now includes Webex Teams, and buyout of Duo Security and Luxtera are other key catalysts.

Click here to know how the company’s overall Q3 performance is expected to be.

Cisco Systems, Inc. Price, Consensus and EPS Surprise

 

Cisco Systems, Inc. Price, Consensus and EPS Surprise

Cisco Systems, Inc. price-consensus-eps-surprise-chart | Cisco Systems, Inc. Quote

Wireless, Security & AppDynamics to Drive Growth

Infrastructure Platforms revenues grew 6% from the year-ago quarter to $7.13 billion in the last reported quarter. Strength across switching, wireless and data center business along with robust adoption of new campus switch, Cat9K and Nexus 9K are likely to benefit the company in the third quarter.

The Zacks Consensus Estimate for Infrastructure Platforms is pegged at $7.438 billion, indicating an improvement of 3.8% from the year-ago quarter.

Meanwhile, Applications revenues had increased 24% from the year-ago quarter to $1.46 billion. The company has integrated Cisco Spark with Webex Platform which enhanced Webex Meeting and enabled it to introduce Webex Teams, fortifying its collaboration portfolio further.

Cisco also unveiled AIOps, leveraging AI, ML and automation to offer enhanced customer experiences and higher business performance. The addition of new products and collaboration synergies are likely to benefit the company in the to-be-reported quarter.

The Zacks Consensus Estimate for Applications is pegged at $1.561 billion, indicating an improvement of 19.3% from the year-ago quarter.

Coming to Security segment, revenues climbed 18% year over year. Robust demand witnessed by web security, unified threat, network security and advanced threat solutions are key catalysts. The momentum is expected to impact the upcoming quarterly results.

The company is striving to leverage machine-learning to deploy security platforms in order to mitigate online risks on a real-time basis, which is yet another positive and is likely to aid segmental revenues in the quarter under review.

The Zacks Consensus Estimate for Security is pegged at $653 million, indicating an improvement of 12% from the year-ago quarter.

Zacks Rank and Other Stocks to Consider

Cisco carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Cirrus Logic, Inc. (CRUS - Free Report) , Universal Display Corporation (OLED - Free Report)   and Synopsys, Inc. (SNPS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cirrus Logic, Universal Displayand Synopsyshave a long-term earnings growth rate of 15%, 30% and 10%, respectively.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

Published in