Cisco's announcement that CEO John Chambers is handing over the position to relatively unknown Cisco sales executive Chuck Robbins could have serious long-term ramifications for the tech giant. But in the short term, it may make for a great trading opportunity.
According to one analyst, the timing of the replacement announcement is revealing, given that earnings are on tap for next week.
"The announcement suggests to me that Cisco's April results to be reported next week should be upbeat," wrote Michael Genovese, who covers the name for MKM Partners, in an email to CNBC. "I have long held that Chambers would step down at a high point for the business in order to give the impression he is leaving the company in great shape."
In addition, though Genovese rates the stock "neutral," he believes that this quarter's earnings and guidance expectations will be easy for the company to beat.
"I am still worried about the underlying fundamentals (i.e., orders for the quarter, which could be soft) but the hurdle for reported revenues and revenue guidance is quite easy," he wrote.
Cisco is set to report earnings on May 13. Analysts are expecting the company to announce earnings per share of $0.53 on $12 billion of revenue, according to FactSet.