Credit Suisse First Boston cut its estimates and price target on Cisco Systems (CSCO).
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.