Zacks Analyst Blog Highlights: Cisco Systems, Hewlett Packard, International Business Machines, Juniper Networks and Viacom

CHICAGO, Nov 12, 2010 (BUSINESS WIRE) -- Analyst Blog features: Cisco Systems (Nasdaq: CSCO), Hewlett Packard Company (NYSE: HPQ), International Business Machines (NYSE: IBM), Juniper Networks (NYSE: JNPR) and Viacom Inc.


Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: Here are highlights from Thursday's Analyst Blog: Guidance Pulls Down Cisco Shares Cisco Systems' (Nasdaq: CSCO) first quarter 2010 earnings (excluding one-time items and including stock based compensation) beat the Zacks Consensus estimate by 2 cents, or 5.7%. Revenue was more or less in line, missing by 0.1%.

As in the past, estimate revisions were minimal prior to the announcement of earnings, leaving the Zacks Consensus estimate for the quarter at $0.35, flat with the year-ago quarter and easily exceeded by Cisco. While positive, the earnings surprise was not exceptional and below the four-quarter average of 11.6%.

However, the 12.6% decline in share prices was not based on the quarter's performance, but rather, on the disappointing guidance.

Revenue Revenue of $10.75 billion was down 0.8% sequentially, up 19.2% year over year and slightly better than management's expectations of a 0-2% sequential decline.

Products, which generated 81% of revenue, were the main reason for the softness, declining 1.2% sequentially although up 20.8% year over year. Services accounted for the remaining 19%, up 1.1% sequentially and 12.6% year over year.

All except the Asia/Pacific region declined on a sequential bases. The Asia/Pacific region was up 5.6% sequentially and 21.8% from last year. The U.S.

& Canada were flat sequentially and up 17.8% from last year. Emerging markets, while declining 3.6% sequentially saw the highest year-over-year growth at 40.8%. The four regions contributed 15%, 55%,19% and 11% of quarterly revenues, respectively.

Product Revenue by Category Routers were 17% of total revenue, representing a sequential increase of 4.4% and a year-over-year increase of 14.6%. The ASR edge routers were particularly strong, growing 200% from the year-ago quarter. Overall, high-end routers grew 16% year over year, mid-range routers grew 7% and low-end routers 8%.

Switching revenue accounted for a 33% revenue share, declining 1.5% sequentially and increasing 23.6% year over year. Modular switches, which make up a relatively smaller percentage of total switching revenue grew 25% year over year and fixed switches, which makes up the balance grew 24%. The Nexus line had another good quarter.

Advanced Technologies (now christened New Products) generated 29% of revenue, up 22.1% sequentially and 37.0% year over year. Most product lines within this category grew strongly from the year-ago quarter, with data center increasing 59%, collaboration 45%, wireless 9% and audio connected home 11%. Security was the only product line to soften, declining 2%.

The Other segment brought in 2% of revenue, down 75.1% sequentially and 52.0% year over year. The company lost some ground here, although management stated that the UCS business continued to do well. We will continue to watch the progress of the UCS business keeping in mind the competitive scenario involving Hewlett Packard Company (NYSE: HPQ), International Business Machines (NYSE: IBM) and Juniper Networks (NYSE: JNPR) among others.

Viacom Beats Zacks Estimates Viacom Inc. (NYSE: VIA.B) today declared financial results for the fourth quarter of 2010 with significant year-over-year increase of both top-line and bottom-line. Importantly, worldwide advertising revenue was $1.17 billion, up 7% year over year. Viacom has also decided to sell its Harmonix gaming unit, which developed the Rock Band video game brand.

Fourth quarter of 2010 adjusted net income from continuing operation was $461 million or 75 cents per share compared to a net income of $432 million or 71 cents per share in the prior-year quarter. Quarterly adjusted EPS of 75 cents was well above the Zacks Consensus Estimate of 69 cents.

Quarterly total revenue was $3,330 million, up 5% year over year. This was also better than the Zacks Consensus Estimate of $3,302 million. Top-line growth of Viacom was primarily due to revenue growth of both Media Networks and Filmed Entertainment segments.

Quarterly adjusted operating income was $837 million, up 4% year over year, driven by the solid performance of the Media Networks segment reflecting higher advertising and affiliate fee revenue. This was partially offset by higher programming costs.

At the end of fiscal 2010, Viacom had $837 million of cash & cash equivalents and $6,752 million of outstanding debt on its balance sheet compared to $298 million of cash & cash equivalents and $6,773 million of outstanding debt at the end of fiscal 2009. At the end of fiscal 2010, debt-to-capitalization ratio of Viacom was 0.42 compared to 0.43 at the end of fiscal 2009.

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