Cisco (CSCO) to Report Q218 Earnings: What's in the Cards?

Cisco Systems Inc. CSCO will release its results for the second fiscal quarter of 2018 on February 14. The company has surpassed Zacks' consensus estimate in three of the last four quarters with a positive average surprise of 1.73%.

In the last quarter, the company reported a non-GAAP profit of 61 cents per share, exceeding the Zacks consensus calculation by one cent. However, the figure has remained unchanged year after year.

Cisco omitted Zacks' consensus estimate for revenue in three of the next four quarters. Revenues fell 1.7% year-over-year in the first quarter to $ 12.14 billion and were almost in line with Zacks' consensual calculation. The decrease was due to the transition to the subscription-based model.

Guidance & Estimates

For the second quarter of fiscal 2018, revenues are expected to increase in a range of 1-3% year-over-year. Non-GAAP earnings are expected to be between 58 and 60 cents per share. Zacks' consensus estimate for profit is 58 cents, while for earnings it is $ 11.73 billion.

A gross margin in the range of 62.5% to 63.5% is expected, while the operating margin is expected to be between 29.5% and 30.5% for the quarter.

Cisco shares returned 26.9% last year, outperforming the industry's 10.1% gain.

Let's see how things are formed for this announcement.

Collaborations to Drive Growth

Cisco's extended partnerships with companies such as Apple, IBM, and Microsoft are likely to drive growth, especially in the cloud and IoT.

During the quarter, the company witnessed improved product adoption. Most companies, including companies such as Ameritas and Orange, have chosen Cisco to improve IT security and improve workflow and automation.

The company also announced several product innovations and partnership programs during the quarter. With a focus on multicloud, the company has announced its HyperFlex platform and container platform, which is expected to expand its product portfolio. According to reports, the company is also working on a hyperconnected car in collaboration with Hyundai, which will help it to enter the market of intelligent automotive solutions.

Cisco has also partnered with Apple, Aon and Allianz to provide better business risk management solutions to businesses, which are likely to have an impact this quarter.

Cisco Systems, Inc. Price and EPS Surprised