Cisco Upgrade To Outperform Is Led By North American CIOs - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
7/20/2009
05:28 PM
Bob Evans
Bob Evans
Commentary
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Cisco Upgrade To Outperform Is Led By North American CIOs

Citing "steady, modest improvement throughout the quarter" from enterprise customers in North America, a prominent securities analyst has upgraded Cisco's shares from neutral to outperform and bumped up his revenue forecast by $210 million for Q4. Are we seeing signs of the bottom?

Citing "steady, modest improvement throughout the quarter" from enterprise customers in North America, a prominent securities analyst has upgraded Cisco's shares from neutral to outperform and bumped up his revenue forecast by $210 million for Q4. Are we seeing signs of the bottom?Saying that his "field checks" show improved visibility and order trends for Cisco, Credit-Suisse analyst Paul Silverstein also took pains not to bang the drum loudly about his expectations for one of the the IT industry's bellwethers, according to TechTraderDaily.com:

"To be clear, we are not hearing about a significant, robust improvement; rather, our checks indicate that Cisco's North American enterprise business has seen steady, modest improvement throughout the quarter with Cisco gaining incremental visibility into its business and seeing modest improvement in order trends."

Silverstein raised his quarterly revenue estimate for Cisco by $210 million to $8.63 billion, which is ahead of the consensus outlook of $8.49 billion.

Other analyst firms seem to concur that while the North American market is stabilizing, problems in Europe appear to be persisting, according to Reuters:

While the U.S. economy may be at or close to bottom, Europe was still showing weakness, analysts said. "U.S. spending trends seem to be improving quarter-on-quarter, while Europe is deteriorating," UBS said in a report on global technology spending.

Reuters added that the "increasing use of the Web for downloading videos, uploading photos to share with friends, and the shift of more business processes like accounting and sales to online systems" will lead sooner or later to additional purchases of enhanced networks and related gear.

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