Cisco Earnings Preview: Another Bomb Hidden In Conference Call?

Cisco (CSCO) reports FQ3 earnings after the bell. The conference call is scheduled for 16:30 ET. We will provide live analysis here.

After competitor Sun Microsystems (JAVA) reported a disastrous Q1, analysts and investors are worried that CSCO will suffer from the same macro effects that derailed JAVA. There’s also a crucial mix issue with regard to service and product sales. Services have been growing faster in the last few quarters, but products have a fatter margin.

Last quarter, CEO John Chambers threw a bomb into the conference call when he said January sales had stalled and he was therefore reducing guidance for the rest of the quarter. Tonight’s outlook will be equally important–for the company, the tech sector, and the market as a whole.

Key Stats

  • Revenue: Consensus is $9.75 billion, up 10%. This is also the guidance figure.
  • EPS: Consensus $0.36, 7% y/y
  • Gross Margin: Guidance is 65%
  • Operating Expenses: Guidance: 37%
  • Tax Rate: Guidance: 24%
  • Outlook: July Quarter (FQ4): $10.3 billion of revenue, $0.39 EPS FY09: $43.39 billion of revenue, $1.69 EPS
  • July Quarter (FQ4): $10.3 billion of revenue, $0.39 EPS
  • FY09: $43.39 billion of revenue, $1.69 EPS

You can view our Cisco model here.

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