Cisco Systems Inc: (CSCO): Strength in Numbers?
As expected, Cisco’s (CSCO) third-quarter earnings release today confirmed its elite status as a premier technology provider. The company reported earnings of $0.37 per share, a jump up over year-ago earnings $ 0.30 per share for the same period, an increase of over 60 percent.
Revenues topped off at $10.4 billion, exceeding expectation of $10.24 billion. Prior-year earnings for the same quarter came in at $8.2 billion.
John Chamber, Chairman and CEO, stated that the company’s strategy during the economic downturn was “ hitting on all cylinders.”
Chambers continued, “Our innovation and operational engines are exceeding our expectations. This applies to products, organization structures, business models, and movements into 30+ new market adjacencies.”
The stock dipped about $0.20 in after-hours trading.
Comments: Nobody can generate cash like these guys (except maybe the Mafia and the Fed.). As one of the darlings of Wall Street, the company is rated a strong buy. The company recently repurchased 3 billion shares of common stock and is on track to purchase another 9.3 billion shares, spending over 62 billion so far. Then again, the stock was hovering in the $26 range two years ago. So yes, the fundamentals are stellar, and the stock buyback program will continue to boost earnings per share, but it’s hard to know how much price appreciation is left in the stock at this time. The time to buy will be when the share price breaks out of its $26-28 range. Or in the unlikely event that Cisco announces a dividend.
Disclosure: Owns shares of CSCO