Analyst Lissa Bogaty says CEO John Chambers reportedly says customers are finding it increasingly difficult to project near-term prospects in a weak IT spending environment. Bogaty says Chambers' comments not only signals a somewhat more uncertain near-term outlook, but sends a slightly more muted message about long-term prospects.
Bogaty cut her 10% long-term growth projection to 9%. She believes the profitability backdrop that supports IT spending is deteriorating in the near term and is creating risk to continued sequential growth. She cut her $19.6 billion fiscal 2003 (July) revenue estimate to $19.3 billion, and trimmed the $0.58 earnings per share estimate to $0.56. She also cut the $21.2 billion fiscal 2004 revenue estimate to $20.8 billion, and cut the $0.69 earnings per share estimate to $0.66.
Finally, Bogaty lowered the $0.63 calendar 2003 earnings per share estimate to $0.60 and cut the $15 target to $12.50.