Wednesday, August 5, 2009

Smart Grid: Cisco expected to report 18% drop in sales: Continues to Outpace the Market (CSCO)

A threefer, first up, MarketWatch:
Cisco Systems Inc. is on deck as the next tech bellwether to report quarterly results, with Wall Street anticipating big drops in sales and profit.

Cisco /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 22.23, -0.21, -0.94%) , whose shares have gained more than 35% since Jan. 1, is scheduled to report fiscal fourth-quarter financials after Wednesday's closing bell.

Analysts currently expect the San Jose, Calif.-based networking gear maker to report earnings of 29 cents a share, on revenue of $8.5 billion, according to data from FactSet Research.

That's strikingly below numbers for the year-earlier period, when Cisco reported earnings of 40 cents a share, on revenue of $10.4 billion.

Cisco is the dominant player in the market for IT gear, commonly referred to as the plumbing, used to connect computer systems in a network or with the Internet. Like other tech giants, the company has been hurt by the slump in IT spending following the economic downturn.

But some analysts say there are indications of improving demand for IT gear.

"Checks with sources close to major Cisco channel partners indicate that orders were being booked and shipped late on the last day of Cisco's fiscal year," JMP Securities analyst Samuel Wilson said in a research note. "This appeared to be a good quarter for Cisco's government and education business, but tougher for enterprise, according to these sources.">>>MORE

And from Minyanville:
One to watch: Cisco Systems (CSCO) reports fiscal fourth quarter earnings after the close. As the world’s largest maker of networking equipment and a member of the Dow it is an excellent gauge of overall IT spending. The company’s core switches and routers have been a road to riches for investors in ‘09; thus far this year its shares, recently upgraded by both Robert Baird and Credit Suisse, are outpacing even the torrid tech heavy Nasdaq.

Cisco stock has however lately lagged select peers as its core business matures. Hence a push into growth areas such as TelePresence and the server market, which will bring it into competition with former collaborator Hewlett Packard (HPQ) whose onetime CEO Carly Fiorina once sat on Cisco’s board. Silicon Valley’s constantly shifting corporate allegiances certainly makes for strange bedfellows.
From cnet:

Cisco looks to ride smart-grid data deluge

Cisco is betting that utilities are more likely to invest in new data centers than new power plants in the coming years.

The tech giant is developing a suite of smart-grid products designed to add networking smarts to the existing grid, including routers for substations and home energy-monitoring systems. But a large chunk of the $20 billion per year in smart-grid spending that Cisco anticipates is in traditional data centers.

Since smart-grid technologies rely on a steady flow of information, Cisco expects that utilities will need to invest in more sophisticated IT systems, said Mark Weiner director of Data Center Solutions and a member of a Cisco smart-grid team.

Once utilities put in smart meters, their data processing and storage needs explode. Instead of sending a person to read meters once a month, information for billing or other applications can be sent back once a day, once an hour, or even every few minutes.

If utilities are regulated to reduce peak-time usage, their IT needs shoot up even higher. Demand response, where a utility can turn down energy use at participating customer sites, requires utilities to poll information regularly from a potential large number of locations....MORE

Previous posts:
Cisco added to Goldman Sachs 'Conviction Buy' List (CSCO)
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