Analyst preview cites improvements in enterprise, carrier capital spending
Investment firm UBS expects Cisco to report “strong” results for its fiscal 2010 first quarter on Nov. 4. UBS cites improved spending in US enterprise, strong federal government sales, and a “modestly improving” carrier capital spending environment.
UBS has raised its estimates for Cisco’s quarter to $8.75 billion, or 3% growth, vs.
Street expectations of $8.74 billion, or 2% growth. Earnings may also improve and exceed intial expectations “with improving demand and execution,” the firm notes in a preview bulletin this week.
UBS also expects Cisco’s M&A activity, which has been aggressive of late with multibillion dollar offers for Tandberg and Starent Networks, to continue:
Cisco’s 2009 M&A strategy may continue to unfold-we will not be surprised if Cisco makes another acquisition. As for the Tandberg deal, we do not see Cisco raising its price (bad precedent).
The jury’s still out on whether a broad market recovery will allow Cisco to recapture market share lost earlier this year, UBS notes.
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