Cisco Systems stock has risen faster than the broader stock market so far this year. Its next quarterly earnings report could offer clues about whether the outperformance will last.
The fiscal third-quarter results, due after the close of trading on Wednesday, come with Cisco stock (ticker: CSCO) up 23% year to date through Friday’s close at $53.37 per share. The S&P 500 has gained about 15%.
Here’s a snapshot of Wall Street’s expectations and some recent history.
â€¢ Wall Street analysts are looking for earnings of 75 cents per share, according to FactSet, and revenue of $13.1 billion.
â€¢ Cisco reported revenue of $12.5 billion during last year’s third quarter, leading to earnings of 56 cents per share.
â€¢ Second-quarter revenue was $12.4 billion, with earnings coming in at 63 cents per share. The San Jose, Calif.-based network-equipment maker reported that sales from software subscriptions improved to 66% of total software revenue, up from 56% in the same quarter a year earlier.
â€¢ Cisco is in the fourth year of Chief Executive Chuck Robbins’ plan to transform it from a predominantly hardware company to one with greater software and service subscription sales, leading to more predictable revenue. After some hiccups and growing pains, it appears to be on the right path after five straight quarters of improved growth.
The 34-year-old company, which established its name with networking equipment, continues to invest heavily in both hardware and software for the cloud, security, the Internet of Things, and data centers.
“The whole IT world is about software in a faster, more agile world for CIOs,” or chief information officers, Cisco Chief Financial Officer Kelly Kramer told Barron’s in an interview at the company’s San Jose campus this month.
â€¢Cisco stock is up 16% over the last 12 months. Wall Street’s average price target is $56.09.
A conference call with investors is scheduled for 4:30 p.m. ET on Wednesday.