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Market Update

After the Bell: Cisco Earnings on Tap

Can management's restructuring plan turn around the firm?

 Cisco Systems (CSCO) reports quarterly earnings after the stock market closes Wednesday. Wall Street analysts, on average, expect the firm to post earnings of $0.37 a share, compared to $0.42 in the year-ago quarter.

During the earnings call, analysts will likely listen for management's recently announced restructuring plan in its bid to turn around the fortunes of the maker of networking products.

Recently, CEO John Chambers admitted the company had "lost its way" and outlined several organizational changes: The firm shut down the Flip video-camera business, announced it is focusing on its core networking businesses, and trimmed head count.

Morningstar Analyst Grady Burkett feels Cisco shares are currently cheap.

In a Stock Analyst Note written before the organization's restructuring plan, Burkett said: "Significant scale advantages, meaningful customer-switching costs, and a reputation as the go-to provider of enterprise-class networking equipment give Cisco a durable competitive advantage in its core markets of routing and switching."

Burkett also added that the company's pursuit of growth is distracting the management and that it must cut low-margin, noncore businesses.

Will the recent announcements be a step in the right direction?

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