Cisco (CSCO) is scheduled to report results of its fiscal third quarter after the market closes on May 18 with a conference call scheduled for 4:30 pm ET. What to watch for:
GUIDANCE: Along with its last report, Cisco guided for Q3 adjusted earnings per share of 85c-87c on revenue growth of 3%-5%. At the time, analysts were expecting the company to report Q3 EPS of 86c on revenue of $13.25B, but Wall Street now expects Cisco to report Q3 EPS of 86c and revenue of $13.34B.
CAPITAL RETURNS: In addition, Cisco announced in its last quarterly report that it raised its quarterly dividend 3% to 38c per common shares. The company also announced an additional $15B share repurchase program. At the time, the remaining authorized amount for stock repurchases including the additional authorization was approximately $18B.
MORGAN STANLEY: In mid-April, Morgan Stanley analyst Meta Marshall lowered the firm’s price target on Cisco to $59 from $61 and kept an Equal Weight rating on the shares while lowering her industry view on Telecom & Networking Equipment to Cautious from In-Line. Though she still expects equipment and storage companies to “sound good” on calendar Q1 earnings call given their backlog, she is now starting to see signs of weakness accumulate, including a more cautious flash survey on hardware and reseller checks pointing to softer second half pipelines, the analyst told investors.