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Wireless, Security, AppDynamics Shape Cisco (CSCO) Q4 Earnings

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Cisco Systems (CSCO - Free Report) is set to report fourth-quarter fiscal 2019 earnings on Aug 14.

Cisco’s fourth-quarter results are likely to benefit from strength in the company’s security, Infrastructure Platforms and applications segments. Further, partnerships and accretive acquisitions will bolster revenue base.

Click here to know how the company’s overall Q4 performance is expected to be.

Cisco Systems, Inc. Price and EPS Surprise

 

Cisco Systems, Inc. Price and EPS Surprise

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

Segmental Highlights

Infrastructure Platforms revenues improved 5% from the year-ago quarter to $7.55 billion in the last reported quarter. Strength across switching, wireless and data center business, and robust adoption of new campus switch — Cat9K and Nexus 9K are likely to benefit the company in the fourth quarter.

Management stated that the subscription-based Catalyst 9000 switching platform has been adopted by several customers, which is likely to aid the segmental revenues in the to-be-reported quarter.

Recently, the company also expanded its “open roaming partnership ecosystem” to include Apple, Intel and Samsung, in order to simplify on boarding Wi-Fi connectivity. The move is likely to be a key revenue driver in the to-be-reported quarter.

The Zacks Consensus Estimate for Infrastructure Platforms is pegged at $7.890 billion, indicating an improvement of 6% from the year-ago quarter.

Meanwhile, Applications revenues had advanced 9% from the year-ago quarter to $1.431 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.

Further, the company’s partnership with the likes of Telenor, Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , and others bode well. 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 $1.5 billion, suggesting growth of 12% from the year-ago quarter.

Coming to Security segment, revenues climbed 21% 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 $702 million, indicating an improvement of 11.9% from the year-ago quarter.

Zacks Rank and Key Pick

Cisco carries a Zacks Rank #3 (Hold).

A better-ranked stocks in the broader technology sector is HubSpot, Inc. (HUBS - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot has a long-term earnings growth rate of 49.4%.

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