On The Fly: What to watch for in Cisco's earnings report

Cisco (CSCO) is scheduled to report results of its fiscal third quarter after the market close on Wednesday, May 16, with a conference call scheduled for 4:30 pm ET. What to watch for: 1. EPS, REVENUE CONSENSUS HIGHER: Along with its last report, Cisco guided for Q3 earnings per share in the range of 64c-66c on revenue growth up 3%-5% year-over-year. At the time, analysts were expecting the company to report Q3 EPS of 63c on revenue of $12.13B, but those figures have since risen to 65c and $12.43B, respectively. Cisco reported revenue of $11.9B in Q3 of fiscal 2017. 2. DIVIDEND BOOST, STOCK BUYBACK: Cisco announced in its last quarterly report that it had raised its quarterly dividend 14% to 33c per share. The dividend was set to be paid on April 25 to all shareholders of record as of the close of business on April 5. Cisco's board also approved a $25B increase to the authorization of the stock repurchase program. At the time, the remaining authorized amount for stock repurchases including the additional authorization was roughly $31B. 3. ACCOMPANY PURCHASE: On May 1, Cisco announced its intent to acquire Accompany, a privately held company that provides on AI-driven relationship intelligence platform for finding new prospects, navigating the selling process, and strengthening relationships. As part of the deal, Accompany founder and chief executive officer Amy Chang was named senior vice president in charge of Cisco's Collaboration Technology Group. Cisco officially acquired the company last Thursday for $270M in cash and assumed equity awards. 4. YOUTUBE ADS: On May 11, Reuters reported, citing a blog post from the Cisco's CMO, that Cisco was pulling its ads off of Alphabet's (GOOG) YouTube due to concerns of its ads appearing on sensitive content. The post indicated that Cisco did not want its ads on live streaming that could potentially have sensitive content. Not long after, however, the Wall Street Journal reported that Cisco had deleted that blog post. A spokesman told the Journal that Cisco did not want to call out any specific company but was instead looking to comment on general concerns over having its brands associated with offensive content.

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