Cisco Systems (Nasdaq:CSCO) will release its fourth quarter results on Wednesday, August 15, 2012. Analysts are expecting the company to report a profit of 41 cents a share, up from 35 cents a year ago.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Surprising Earnings Results

What to Expect: Cisco is expected to report 41 cents per share, up 17.1% from a year ago when the company reported earnings of 35 cents per share.

Analysts are projecting earnings of $1.63 per share for the fiscal year.

Cisco is expected to beat last year's reported revenue of $11.2 billion and come in at $11.62 billion for the quarter. The anticipated revenue for the fiscal year is $45.98 billion.

Company Performance: In the past four quarters, revenue has shown consistent growth. It rose 6.6% in the third quarter, 10.8% in the second quarter, 4.7% in the first quarter and 3.3% in the fourth quarter of the last fiscal year.

The past eight quarters have represented an increase in profit for the company; for the last four, it has seen an average of 4.8% growth in profit year-over-year.

CSCO's P/E ratio of 12.6 is under the industry average of 22.85. A low P/E ratio may indicate that the market expects relatively slower earnings growth. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator

Over the past quarter, the stock price has risen to $17.70 from $16.70 on May 14, 2012. Cisco's stock price is currently in the middle of a rising streak. The stock has risen $2.58 per share since July 24, 2012.

The Competition: Cisco Systems is a multinational corporation engaged in the design, manufacturing, and sales of Internet Protocol-based consumer electronics, networking, and other services related to communications and information technology. The majority of analysts (17 of 30) rate Cisco a buy. Ratings have moved up from hold to moderate buy in the last three months.

The company's closest competitor in the communications equipment industry is Telefonaktiebolaget LM (ERIC). Analysts are more optimistic about Cisco than about Telefonaktiebolaget LM. Only three out of 12 analysts rate the latter a buy.

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Tickers in this Article: CSCO

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