Cisco's first fiscal 2013 quarter is expected to miss the mark. Citing weak enterprise and flat service provider spending, two Wall Street firms have cut their forecasts for Cisco's 2013 Q1, which the company reports next Tuesday.
Deutsche Bank cites "below seasonal bookings and rollout trends" in campus switching, enterprise routing, and video collaboration, according to this post in Barron's. Datacenter 10G Ethernet switching rollouts are below expectations, and telco edge and core routing upgrades are "flattish;" meanwhile, UCS, enterprise wireless, and security are better than expected.
Deutsche expects BYOD to drive campus switching upgrades starting in early calendar 2013. Next year might also see private cloud rollouts driving Nexus switch sales and UCS upgrades, while LTE and carrier WiFi spur demand for Cisco ASR edge routers and CRS-3 upgrades, the firm states.
Deutsche expects Cisco revenue and earnings to come in below consensus estimates: $11.51 billion in revenue and 45 cents per share, vs. $11.8 billion and 46 cents. Cisco last quarter set its own sights on revenue of $11.49 billion to $11.71 billion for Q1.
Oppenheimer also cut its estimates for Cisco's Q1, to $11.6 billion in revenue and 45 cents, from $11.8 billion and 46 cents, according to Barron's.
Oppenheimer cites decelerating demand in the US based on channel, supplier and competitor comments on muted spending, as well as the uncertainty of this week's presidential election and the "fiscal cliff" - expiring tax cuts and $1.2 trillion in spending cuts that threaten another recession - coming early next year.
Oppenheimer expects Cisco to forecast a conservative Q2, so much so that it will undercut consensus estimates. Oppenheimer cut its own expectations for Cisco's Q2 to $11.9 billion and 47 cents, from $12.25 billion and 48 cents. The Wall Street consensus for Cisco's Q2 is $12.08 billion and 48 cents.
More from Cisco Subnet:
The Cisco Subnet blog is written by Network World managing editor Jim Duffy Visit the Cisco Subnet home page daily and while you are there, subscribe to the Cisco Alert e-mail newsletter, which includes news and views generated by the Cisco Subnet community as well as Cisco-related stories on Network World and elsewhere on the Web.
Follow Jim Duffy on Twitter