Cisco delivered another lemon on the earnings guidance front last night.
Citi highlights the risks this poses to tech manufacturers, lower down the value chain:
Figure 1 in this report details the exposure to Cisco across the EMS Technology Supply Chain with Jabil at 15%, SMOD at 14%, Flextronics at 9% and Celestica at 9% of each of the companies’ respective sales. While we recognise the EMS companies manufacture Cisco & other OEM products, we note many of these companies benefited from Cisco’s product & order strength for much of 2009/2010 and we believe this will no longer provide a tailwind for the EMS sector.
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