Cisco Q1 tracking well

Analyst notes positive channel checks but UCS traction limited

Oppenheimer & Co. is raising its estimates for Cisco's Q1, citing bullish statements from the channel. The firm found after conducting 40 interviews in the U.S. and Europe that Cisco's sales are tracking ahead of expectations, thanks to a resumption in spending and upgrade activity.

Sixty-five percent of those 40 respondents believe Cisco's sales will grow sequentially in Q1. Forty-three percent expect 1%-5% growth and another 23% expect 5%+ growth, according to Oppenheimer.

Consensus estimates are for 2.4% growth. Oppenheimer expects 2.7% now, after checking with the channel. As a result, the firm is raising its revenue estimate to $8.85 billion -- slightly above the high end of Cisco's guidance -- and EPS of $0.31, which compares to consensus of $8.73 billion and $0.31.

One of the drivers for the quarter will not be Cisco's Unified Computing System, Oppenheimer reports in its channel check bulletin:

While interest remains high, UCS traction has been primarily limited to trials and starter kits. An equal split of our UCS-certified respondents (27% of total) target low and moderate adoption over the next 12 months. We expect to see a stronger UCS ramp in 2010.  

For Cisco's fiscal year 2010, Oppenheimer expects sales of $36.72 billion and EPS of $1.33, ahead of Street expectations of $36.41 billion and $1.32.

More from Cisco Subnet:

  • Cisco rival Brocade for sale?
  • HP blade counters Cisco security approach
  • What's next for Cisco after Tandberg deal?
  • Manly Man IOS Features
  • Cisco Releases IOS 15.0
  • Cisco training and network design books up for grabs in October
Win great stuff from Cisco Subnet Like e-mail? Subscribe to the Cisco Alert newsletter.Cisco Subnet RSS feed

Like RSS readers? Subscribe to the

Follow all Cisco Subnet bloggers on Twitter.Jim Duffy on Twitter

Follow

Related:

Copyright © 2009 IDG Communications, Inc.

The 10 most powerful companies in enterprise networking 2022