A 46 Percent Drop in Profit and Cisco Still Beats Estimates?
by John Paczkowski
Posted on August 5, 2009 at 1:23 PM PT
Hard to believe that this is good news: Cisco reported a 46 percent decline in quarterly profit this afternoon, posting Q4 earnings of 31 cents a share on sales of $8.54 billion, compared with 40 cents a share on sales of $10.36 billion in the same period last year.
An appalling drop. But one that investors welcomed, because as lousy as its performance might seem, Cisco’s earnings still managed to beat the Street. Analysts who follow the company had expected it to report earnings of 29 cents a share on revenue of $8.52 billion.
Is this what they mean by “green shoots”? Sigh.
“Cisco delivered very solid quarterly and annual results in a challenging economic environment, as we continued our focus on disciplined execution and our customers’ success,” Cisco CEO John Chambers said in a statement. “We are confident in our strategic position in both existing and thirty adjacent markets. We saw a number of positive signs this quarter in the economy and in our business, especially comparing our sequential quarter-over-quarter order trends. If we continue to see these positive order trends for the next one to two quarters, we believe there is a good chance we will look back and see that the tipping point occurred in our business in Q4.”
Cisco (CSCO) shares are up two percent at $22.60 on the news.
Comments
Why are you stressing STILL beat estimates? This should be a knock against the analysts for putting out incorrect estimates, not a congratulations for CSCO beating the wrong estimates. Had the analysts said 32 or 33 cents a share, profits would still be down over 40% and CSCO would have missed estimtes. Totally different story.
Write a piece on how the analysts continue to screw up the estimates, not how companies with 50 or 60 or 70% lower profits are beating them. These analysts have access to the company financial statements, they do channel checks, they have access to personal to figure this stuff out.
I just don’t get it.
Posted by Joe Stavitzke at August 5th, 2009 at 2:05 pmThe headline is intended to be sarastic, Joe.
Posted by John Paczkowski at August 5th, 2009 at 2:23 pm