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Earnings Outlook: Cisco earnings: Tariffs could throw a wrench into strong sales momentum

Cisco Systems Inc.’s strong year may hit speed bumps going into 2019, as higher prices and uncertainty in the U.S.-China trade war raise the possibility that businesses may cut back on enterprise spending to weather the effects of tariffs.

Cisco CSCO, -3.16% is scheduled to report earnings after the closing bell on Wednesday. The San Jose-based networking giant has grown revenue three quarters in a row and topped a record $12.8 billion in the latest-reported quarter, driven in part by its Catalyst 9000 switch, which includes a multiyear software subscription that gives the company a recurring revenue stream.

While that strength is expected to extend to Cisco’s fiscal first quarter, trade uncertainty may pump the brakes on that a bit going forward, according to Raymond James analyst Simon Leopold, who has an outperform rating and a $50 price target on Cisco.

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