Cisco Systems Leads Tech Higher

Michael Teague |

John Chambers 2013Tech shares rallied on Thursday, led by Cisco Systems’ (CSCO) 13 percent leap to as high as $24.25.

The increase dragged other sizeable network and communications stocks along with it, including Juniper Networks (JNPR), up nearly 4 percent, Palo Alto Networks (PANW) up 3.6 percent, Riverbed Technology (RVBD) up 4.4 percent.

Cisco reported fiscal third-quarter earnings during late trading on Wednesday that allowed shareholders and investors to breathe a little easier after concerns that the general trend in global tech markets away from hardware and toward software and cloud services was beginning to take its toll on the company.

On revenue of $12.2 billion, Cisco earned $2.5 billion or $0.46 per share, against the prior year period during which the company earned $2.2 billion or $0.40 per share on revenue of $11.6 billion. Excluding items, the company earned $0.51 per share, ahead of expectations of $0.49, while revenue beat expectations of $12.18 billion.

For the current quarter, the company predicts earnings per share of $0.50 to $0.52, which would be a match with estimates, and sees revenue up between 4 and 7 percent from the prior year period, a range of $12.16 to $12.5 billion, also in line with estimates of $12.47 billion.

The company cited better sales in the Americas as well as in emerging market countries, and saw strong performances from its wireless, data center, services, and service provider video categories, along with an 4 percent overall increase in product orders.

Cisco is seen as a bellwether for the hardware-based tech industry due to its global reach, as well as its extensive involvement in publicly funded projects throughout the world. Many of these companies, such as Juniper Networks and IBM (IBM) have struggled recently as users increasingly shift from desktop to mobile, and from hardware to software-based systems.

Correspondingly, the company’s earnings can be seen as a vindication of its attempts to adjust to the new landscape, with increased focus on wireless and cloud computing, as well as pursuing acquisitions in international markets.

Other tech shares that appeared to benefit from Cisco’s performance on Thursday included VMware (VMW), up 2.6 percent, along with EMC Corporation (EMC), up nearly 5 percent, and Hewlett-Packard, up 2.5 percent.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
PANW Palo Alto Networks Inc. 129.37 0.02 0.02 1,495,063
IBM International Business Machines Corp 164.79 4.44 2.77 4,427,395
VMW Vmware Inc. Class A 81.16 0.61 0.76 1,712,573
CSCO Cisco Systems Inc. 29.95 0.62 2.11 29,991,126
JNPR Juniper Networks Inc. 27.75 0.82 3.04 4,537,028
BWXT BWX Technologies Inc. 39.20 -0.08 -0.20 503,041
EMC EMC Corporation n/a n/a n/a 0

Comments

Emerging Growth

CMX Gold & Silver Corp.

CMX Gold & Silver Corp is an exploration stage company. The Company is engaged in the acquisition, exploration and development of silver and copper/gold properties in the USA.

Private Markets

Knightscope

Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.