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Cisco Plunges In AH Session After Major Cut To Guidance On Earnings Call, Sees Up To $1 Billion Revenue Shortfall In Q2
The conference call is still ongoing, but the company has dropped a bombshell by cutting revenue guidance by 10%: it now anticipates a 3-5% revenue growth from Q2 last year, which was $9.8 billion, or therefore a range of $10.1-$10.3 billion. As the estimate on the street is for $11.1 billion for the next quarter, the firm just whacked up to $1 billion of the top line. Weakness attributed to US Cable segment, public spending, and Europe. In other words, everything. CSCO also sees Q2 EPS 32c-35c vs. consensus 42c. In other words, the second tech bubble may just have popped although don't count out the Fed-backed momos just yet. The stock is down 13% as of this posting, and the futures are plunging. We will bring you the call transcript asap.
More from Fly on the Well:
- Cisco sees FY11 revenue growth of 9%-12% FY11 consensus is $45.28B.
- Guidance taken from Cisco's Q1 earnings conference call. :theflyonthewall.com
- Cisco sees Q2 revenue up 3%-5% YoY, Consensus is $11.08B.
Here is why we have the over on Brian Sack announcing the imminent formation of Cisco Lane I, aka the Sack Put on, cue Tepper, EVERYTHING. Or a far simpler explanation: Friday's QE2 inaugural POMO edition will be known as the CISCOMO.
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Green by the close tomorrow. Revenue disappointment priced in. <sarc>
In this market that type of sarcasm has a way of becoming reality quickly unfortunately.
Proof of "summer of recovery".
Even as some unattractive reports like Cisco, JD, etc. come out seems they'll be embraced sooner than later again as the wall of QE dollars "wearing beer goggles" hoses down everything. Seriously - market will be stuffed w/ new FRN's from here on...until that changes, any dip will be bought. Book values, valuations...they mean nothing. Actual solvency of companies aren't even important. Only thing that matters is the QE...until daddy takes his printing press away.
you all may be right. but it also may be mr. market's way of getting sentiment, etc. out of the bearish pits of last mid summer (based more on "reality") so the actual bear market (which this is and has been since late '07) can resume.
re: fed omnipotence, check out the market action during fall '08: up very hard on various fed announcements of economic/market support, then down to new lows following.
one might think there is even institutional advantage for the fed at some point prior to the resolution of the contretemps over raising the debt ceiling to give the recalcitrant members of the house of representatives a whiff of the grapeshot.
I think that will be a bit hard to do, maybe on Friday? - Ned
One Billion US Dollar rev miss hard to overcome. Lot of air being sucked out of the room
I wonder just how much of this shortfall is due to their in-house financing pulling forward demand, and how much is due to the completion of the national security state (Homeland Security gave away lots of grants to local govs over the last few years)?
Not to worry ... 8 straight days of POMO, bitchez.
They will have this market dancing and singing "Dixie". Buy 'em now, before the rush.
(yes, Virginia, that would be sarcasm, just in case somebody doesn't grok it)
CSCO was $82 ten years ago. it's done. son.
Yeah, told my wife's boss to sell it around then. He just knew it was going higher.
Probably still holding it. It always comes back ;-)
Wow...just glanced at the schedule but didn't let it sink in until your comment.
Wonder if CSCO's miss will drag down commodities and trigger yet another flight back into U.S. Dollars and AAA-rated, gilt-edged U.S. Treasuries?
Perhaps this miss was on purpose.....
Or...A flight out of high-flying, frothy US tech stocks and into scarce natural resources, developing market debt and equity, Asia tech and almost anything not nailed down in China. Heck art and wine auctions are setting new records weekly over there. Gotta go with the "hot" not with the "rot"
Cotton bitchez!
Dollar Hollar!
White Collar Holler (Nigel Russell)
Well, I rise up every morning at a quarter to eight,
Some woman who's my wife tells me not to be late.
I kiss the kids goodbye, I can't remember their names,
And week after week, it's always the same.
And it's Ho, boys, can't you code it, and program it right?
Nothing ever happens in the life of mine.
I'm hauling up the data on the Xerox line.
Then it's code in the data, give the keyboard a punch,
Then cross-correlate and break for some lunch.
Correlate, tabulate, process and screen.
Program, printout, regress to the mean.
Then it's home again, eat again, watch some TV.
Make love to my woman at ten-fifty-three.
I dream the same dream when I'm sleeping at night:
I'm soaring over hills like an eagle in flight.
Someday I'm gonna give up all the buttons and things.
I'll punch that time clock till it can't ring.
Burn up my necktie and set myself free,
Cause no one's gonna fold, bend or mutilate me.
-----------------------------------------------------------------
Copyright Nigel Russell and dedicated to the city of Bramalea,
Ontario, Canada.
Fire in the hole:
http://link.brightcove.com/services/player/bcpid1418565565?bctid=6710722...
LOL
LOL indeed. What could go wrong? Risk? It doesn't exist. This yet another reason not to participate in "bring your daughter" to work day.
Market will open SPX down 10 or so and rally to green. Everyone will buy dips tomorrow. Listened to most of Chambers on call. It's mostly a CSCO problem, not macro.
Nice set up to run the market lower in at the open and buy the dip. Rinse and repeat.
If you exclude the continent of Europe from your definition of "Macro", you are absolutely correct.
I meant macro in the sense of tech spending. JNPR sees a whole different macro environment.
Judging by the market's reaction to JNPR AH, it would seem it is concerned with the management's credibility.
You know better than that, it's all boats going lower on the tide right now. Forget JNPR's AH price, read what they had to say about the macro (as in enterprise global) spending. Then tell me that it's not a CSCO specific problem.
Harry, you were just in Detroit, right? What macro outlooks did the Mercury and Pontiac executives share with you? Maybe you could jot those down and submit to TD for guest post.
That's not Harry, It's Leo... Squeezed the bullshit and hopium out of one tube and put it in another.. Sprinkle a little pixy dust on and whalla!... We have a great outlook with 22% unemployment and a declining manufacturing base..
If only we could get these stupid Americans to spend more money so Walmart and Macy's can hire people at $9/hr with no benifits and push up revenue and margins for retailers.. Ohhh yeah... great idea..
Its not a CSCO specific problem.
Damn HW, you must be high all the damn time. Good for you fella.
Notta macro problem. That's rich.
8}
$125 billion companies don't have stock specific issues unless it's the health of a Steve Jobs icon.
Exactamundo. More telling than cable orders being down are the lack of orders in the public sector. Throw in U.S. states, and countries facing austerity... and there ya go. It wouldn't surprise me that CSCO was proving vendor financing to these guys, either.
Didja just see ex-Chairman Greenspan making statements accusing the US of weakening the USD??? So much for Alan being on Banana Ben's Facebook friend's list.
The rats are jumping the ship.
More like Greenspan kicking some rats off the ship. It's the Greenspan Foot!
Nah, it's more like Greenspan "sticking his dick in the mashed potatoes." Like all other evil-doers, after his turn at flinging poo is officially over, they then change their course to match the wind. By the time he dies, the MSM will have him labeled firmly as a hard money man. Meanwhile though, some of us (who will die eventually too) see him standing at the table with his dick in his hand.
Just love you post, if you take portions of you post you are saying Al baby is:
"Hard dick evil-doer flinging poo whilst inserted in the mashed potatoes."
Love the image. Only a Phd in econ can do that I guess. Funny hobby for that profession, never would have guessed that.
Too funny! LMAO at the imagery.
Elites no longer have home field advantage. The internets be disruptin. Thanks algore 8)
ike: military industrial complex; mcnamara/johnson: vietnam; carter: palestinians; clinton/bush: income/wealth inequality; greenspan: bubbles, deregulation. obama probably will regret his sacrifice of the republic and the constitution if he survives (though, obviously, he shares credit).
I love how - suddenly - CSCO is not a tech bellweather anymore. CSCO's problems are micro, not macro... rationalizations, ad nauseum.
CSCO is out in front... global. CSCO is macro. CSCO is cutting projections. This particular flavor of bad news is unspinnable.
Europe is a fiat continent.
So this was done all by design to give Da Boyz a chance to buy in lower...never can catch a break.
The reaction is designed, yes. Get everyone to sell everything at the open tomorrow (forget about CSCO) and then the buyers run in and up it goes. Pretty simple really.
And since POMO on Friday, I further suggest that Thursday afternoon is green for the Fed front running of the bulls.
Here comes "Harry the troll" to make sure you believe in the entire fraud of a market.
Yeah, buy 'em lower, because they *always* go up. NOT.
You're a shill, Harry. Just like Cramoo and Krudlow and Stein (where is that asshole, anyway ?)
Not a HW fan but he's more than likely correct. As an investor, go long. Harry can see what many others don't want to...the market is programmed and up it will go.
As an American (world citizen) worried about where all this is going and how it will end - I feel your pain and know this is all wrong and think will end very, very bad for us.
Yeah - but the big trick in playing this POMO/QE rigged market is beating inflation.
Looking at the Dow or S&P priced in terms of most appreciating commodities, they're not doing as well as advertised.
"Not a HW fan but he's more than likely correct. As an investor, go long."
I see the propaganda is working. That's right, what could go wrong? Risk? Doesn't exist.
"the reaction is designed" LOL yeah Cisco missed revs by a billion "on purpose" - you're a fucking moron.
Who is everyone, HW?
Brings back memories of Lucent in the spring of '00. Rich McGinn (the slimy bastard) had his own corporate version of QE, but he escaped unscathed while the temple collapsed and Rome burned.
LU in spring 'uh-oh--yep, and Carly was spinning her magic. - Ned
Intel used the same trick last quarter, guide down soon after earnings, then beat it easily. Macro might be weaker than first thought, but these people sure knows how to get the hungry pavlovian dogs to bite and bite. Besides, they needed to buy back some stocks cheap to make up for the stock options. The whole year the tech market has been rallying there weren't many chance for the tech firms to replenish to make up for the dilution from options. See Google just announced 10% cash bonus across the board, to minimise giving options, its getting more expensive to give options nowadays - it tells you (besides insider selling) that stocks are probably even higher than the dot-com days.
Chart: NQ
Broadening Top.
http://99ercharts.blogspot.com/2010/11/nq_10.html
http://www.zerohedge.com/forum/99er-charts
This is a harbinger of why QE2 will not live up to expectations and cease to raise the market. When people wake up and realize the absurd risk of loading up on a bunch of overvalued stocks... they'll stay in bonds. During the first QE, in the Spring of 2009, most stocks were undervalued by almost any metric. We were miles below the 200 DMA. Everything now is reversed.
Well, either that or speculate in commodities/ raw material stocks.
whose expectations? Ben's Hopes?
So much for job creation. QE3 comes next. Only one place for the PMs to go.
Not until another market meltdown. Then it will be B-52 Ben with Krugman riding the fiat A-bomb like Slim Pickens in Doctor Strangelove.
on CNBC :-))
Cisco Profit Tops Forecasts, but Shares Slide Lower
http://www.cnbc.com/id/40111042
"slide" lower LOL
and in other news... the bankruptcy filing by ABK has generated massive profits for the holders of its credit-default swaps.
Short msft too?
DOUBLE POMO DAY GOOOOO
Yo dawg! We heard you like POMOs, so we put a POMO in your POMO so you can front-run while you front-run!
roooooooooooofl
I am SHOCKED, SHOCKED, SHOCKED at this announcement.
Straddling the S&P into next week... 8 POMO days in a row could mean we go up 100 points or down 100 if the PM's pull the rug out from under the rally and take their hard earned POMO money elsewhere. Don't know whats going to happen, but guarantee it will be exciting/nauseating/diarrhea
Shame too as CSCO finally closed that gap from their last report in August. See also MAY09.
Lots of securities are filling their gaps from last week.
hey...new normal. What a friggin
surprise. I was firmly in denial, what
with the Berspanke put.
Seiously though, we don't need any
of that stinkin' growth that's been the bedrock
of the markets since the buttonwood
tree. POMO will save us all.
This may be a dumb question, But what do earnings matter when you have fucking machines doing all the trading? The Machines do not know about earnings. The factory didnt program them that way.
The machines serve to shear the sheeple.
When the sheeple don't show up up to
trade, neither will the machines
Well be trading wheather we like it or not . Where do you think our huge tax hikes will be going starting next year. To the banks so they can buy stocks .
Short AMZN at the open tomorrow, this is gonna snowball.
http://www.foxnews.com/us/2010/11/10/consumers-boycott-amazon-pedophile-...
CSCO is the king of the router world and the key to every new IT purchase..The usual cheerleader Chambers was a might realistic for the first time ever...This is a jolt..Things are not good out there contrary to what the idiots at CNBC et al portray...
i am definately not as market saavy as the normal posters here but i definately remember the popping of tech bubble 1.0 being blamed on a CSCO warning........does history repeat, they(CSCO) definately aren't the heavy weight of yesteryear.
"as market saavy as the normal posters here"
Now that is just too damn funny. The normal posters here have been calling for a collapse, not just of this market but the entire world, for over a year that I can tell.
They've only been wrong by a few thousand points on the DOW.
If you can spell market you are more saavy than most posters. Just read who is the most ridiculed and you will get a sense of reality.
Or just go and but some weapons and beans, build a shelter in your back yard and cover up for the upcoming calamity (be advised no one here can tell you when bad things are going to happen or even exactly what they mean by bad things, but rest assured - calamity is upon us!!) You will be welcomed here like a returning hero.
LOL hey dumbass isn't the DOW priced in dollars?
So are most debts.......
what missile ...
we got CSCO bombs
fore...
3 wood bytches
It won't happen, but Chambers has to go. He has entered into too many acquisitions that were completely written off. There needs to be a better vision for Cisco with new leadership.
Well, at least RAX is still the mother of all short squeezes and that's all that matters. :)
I would have thought this might be the trigger for a broader correction in the NASDAQ and S&P. The next POMO money could all go into bonds (which have corrected recently) and PMs. But there has been no overnight sell-off in Japan.
Cardboard as a leading indicator still gets no respect.
EURO daily chart bearish warnings continue.
US Dollar daily chart bullish warnings continue.
http://stockmarket618.wordpress.com
Vendor financing, bitchez!
What!!!? Does this mean that Cisco is actually keeping clean books?!?!? WTF?!?!? Somebody better take down their accounting firm pretty quickly before this kind of accounting catches on. I mean, can you imagine what a disaster THAT would be?!?!?
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