One does rather wish companies would simply make money, instead of merely announcing they’ve exceeded expectations. Cisco Systems (CSCO 10.37%) experienced a bit of a tumble – 9.7% by mid-morning, if one bothered to check – despite, apparently, doing rather well. Honestly, the fuss and bother!
The analysts, bless their predictable hearts, anticipated $1.02 a share on $15.1 billion in sales. Cisco, with a flourish, delivered $1.04 (after a bit of accounting tidying, naturally) on $15.3 billion. One might have hoped for a champagne reception, but the market, it seems, is a terribly ungrateful guest.
A Quarterly Revenue, and All That
A new quarterly revenue record, you say? How perfectly… pedestrian. Up 10% year over year, adjusted earnings up 11%, and GAAP earnings surging 31%. Though, naturally, the GAAP number wasn’t quite as dazzling as the adjusted one. A mere $0.80 a share. One wonders what sort of clever accounting is going on behind the scenes. Still, a surge, of sorts.
Apparently, Cisco is enjoying “accelerating, double-digit growth in product orders.” Across all geographies, no less! And robust growth across all customer markets! Product orders are up 18%. One feels almost… overwhelmed by the positivity. Though, one suspects, it’s all rather temporary.
A Buy, You Say? Don’t Be Absurd.
They’re guiding for continued sales growth – around $15.5 billion for Q3, and $61.5 billion for the full year. How… ambitious. But here’s the rub, darling. Profits appear to have stalled. Q3 GAAP profits are forecast at a paltry $0.75 a share (give or take a penny, naturally). A sequential decline, you understand. And full-year earnings? A range of $3 to $3.08. No resumption of growth in sight. They blame rising costs for computer memory. One suspects it’s simply a lack of imagination.
At $77 a share, the stock trades at over 25 times earnings – and earnings are, shall we say, resting. Frankly, it looks less like a hold and more like a rather elegant exit strategy. One wouldn’t dream of recommending it. A bit of a bore, really.
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2026-02-12 18:34