Cisco Holds Up Better Than Expected (CSCO)

Cisco Systems, Inc. (NASDAQ: CSCO) has posted earnings of $0.42 non-GAAP EPS on revenues of $10.3 billion.  Estimates from Thomas Reuters (First Call) were $0.39 EPS on $10.3 billion in revenues.  While everyone is waiting for guidance, this earnings report and other metrics below  looks better than many expected.

• The company also ended up with $26.8 billion in cash and equivalents.
• Cash flows from operations were $2.7 billion
• Cisco spent $1 billion to repurchase 46 million shares of common stock at an average price of $21.95.
• It is managing receivables well: days sales outstanding inaccounts receivable (DSO) at the end of the first quarter of fiscal2009 were 29 days, down from 34 days last quarter and down from 33 daysat the same quarter last year.
• Non-GAAP inventory turns were 11.6 in the first quarter of fiscal 2009

Cisco saves guidance for its conference call, but here are the guidance numbers to look for:

• For the quarter ahead, estimates are $0.39 EPS (down from $0.40on Monday) and $10.41 billion in revenues (down from $10.49 billionMonday).
• For its fiscal year ending in July, estimates are $1.60 EPS (downfrom $1.64 Monday) and $42.16 billion in revenues (down from $42.52billion on Monday).

Cisco was weak with tech and with the market today.  Shares closed down5% at $17.40 in regular trading. They are up about 1.5% at $17.60in after-hours trading.

Until you hear John Chambers’ guidance and tone, this is very much so unfinished business.

Jon C. Ogg
November 5, 2008