Ahead of the bell: Cisco rises on strong results
NEW YORK (AP) — Shares of Cisco Systems Inc. rose nearly 7 percent before Wednesday's opening bell, after the company posted an 18 percent jump in profit for its latest quarter, helped by a renewed willingness by large U.S. businesses to invest in big-ticket networking gear.
The world's largest maker of computer networking gear's adjusted earnings of 48 cents per share beat the average estimate of analysts surveyed by Wall Street by 2 cents per share. Revenue rose 5.5 percent to $11.9 billion, which also beat Wall Street estimates.
The San Jose, Calif., company also projected earnings for the current quarter of 47 cents to 48 cents per share. Analysts have been expecting 48 cents per share. The company projected revenue of $11.9 billion to $12.1 billion, bracketing the average analyst estimate.
William Blair analyst Jason Ader backed his "Market Perform" rating for Cisco, saying that it fared better than other large technology companies, thanks to solid sales and strong finances, especially in its key U.S. enterprise business.
Orders at that segment, which the company sees as a top indicator of global technology demand, rose 9 percent from year-ago levels.
Ader said that while he prefers to wait for more signs of increasing demand for growth catalysts, the stock's current share price is at a reasonable level.
Sterne Agee analyst Shaw Wu backed his "Buy" rating for the company, also noting that its results were impressive compared to those of other tech companies.
"We continue to believe Cisco is an underappreciated turnaround story similar to what we have seen with Apple, IBM and EMC Corp. in the past," Wu wrote in his noted, adding that he finds the stock's current share price attractive.
Cisco shares rose $1.15, or 6.8 percent, to $18 in premarket trading.