We expect Cisco to provide guidance below the Street for FQ1. While Cisco saw the slowdown
before other companies, we believe this is due to Cisco’s higher share in the enterprise market
than peers, making it far from immune to current weakness.We lower our FY12 and FY13
revenue estimates but raise our FY12 and FY13 EPS estimates, after layering-in ~$1B in cost
savings by FQ312, despite lower rev. We see little reason for the shares to drift higher near-term
given the tough macro outlook. We also continue to believe Cisco cannot sustainably grow top
line while maintaining margins and advocate splitting into smaller, more homogeneous pieces.
Remain EW.
before other companies, we believe this is due to Cisco’s higher share in the enterprise market
than peers, making it far from immune to current weakness.We lower our FY12 and FY13
revenue estimates but raise our FY12 and FY13 EPS estimates, after layering-in ~$1B in cost
savings by FQ312, despite lower rev. We see little reason for the shares to drift higher near-term
given the tough macro outlook. We also continue to believe Cisco cannot sustainably grow top
line while maintaining margins and advocate splitting into smaller, more homogeneous pieces.
Remain EW.
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