Analyst Raj Srikanth says recent weakness in the IT spending outlook has lead him to cut estimates for Cisco. He now assumes an economic recovery that begins in late 2003 instead of his previous assumption of early 2003. He notes Cisco derives 80%+ of its revenue from the enterprise market; making it very closely correlated with general economic growth.
Srikanth cut his $0.15 third quarter earnings per share estimate to $0.13, and cut the $4.93 billion revenue estimate to $4.69 billion. He also cut the $0.59 fiscal 2003 (July) earnings per share estimate to $0.53; he set $0.59 fiscal 2004 earnings per share. Finally, Srikanth maintains his buy rating in light of the company's financial strength and market dominance. He cut the $19 target to $17.