Wednesday, May 11, 2011

Earnings Preview for Cisco Systems (CSCO) 3Q 2011

Overview
Cisco Systems (CSCO) will  report 3Q 2011 earnings after the close of trading on Wednesday, May 11. The results are typically available at 4:05 p.m. EST and will follow with a conference call at 4:30 p.m. Note that Cisco shares have traded lower after each of the four previous reports.
  • Key Measures:
    • Cisco always typically provides a value for Non-GAAP Earnings Per Share (EPS) that is comparable to consensus views. In the previous conference call back in February, Cisco targeted Non-GAAP EPS in the range of $0.35 to $0.38. The current consensus is $0.37 (Source: Yahoo! Finance).
    • Revenues are the next most important measure for Cisco earning. 2Q 2011 earnings conference call, Cisco said it expects 3Q 2011 revenues to increase 4% to 6% year over year. Based on the 3Q 2010 revenue figure of $10.4 bln, the projected range would equate to $10.816 BLN to $11.024 BLN. The consensus is on the lower end of that range at $10.86 bln.
  • Cisco Plays: Juniper Networks (JNPR), F5 Networks (FFIV). Recall, both compnaies reported earnings that topped Street forecasts.
Cisco Systems  Inc. CSCO Stock Technical Analysis


05/09 Weekly  CSCO resistance , pivot & support
Resistance R3 $18.12, R2 $17.93, R1 $17.74
Pivot Point $17.51
Support     S1 $17.32, S2 $17.09, S3 $16.90

05/11 Monthly  CSCO resistance , pivot & support
Resistance  R3 $20.06, R2 $19.21, R1 $18.44
Pivot Point $17.44
Support     S1 $16.59, S2 $15.67, S3 $14.82

Technical Analysis Stock Charts: Charts Below
60m chart
Daily chart
Weekly chart

Cisco Systems shares are down 12.9% Year to date which is 30% over the past year. Last earning Cisco deliver another disappointing earnings release, look for support near $17, followed by $16.50. Cisco are Currently right at the key $17.50 level, a previous resistance going back to mid-March and nearly coinciding with the 50-Day moving average. A push through this level would set up a run back toward $18.50 which will be bullish for the stock. 

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