This from an email newsletter this morning;
Cisco Systems reported EPS of 21 cents compared to 16 cents a year ago, up 31% year-over-year. Revenues rose to $3.55 billion, up 48% during the same period and up 12% sequentially, which came slightly above expectation.
Cisco experienced strong order growth geographically. Asia (excluding
Japan) showed an increase of 60% year-over-year, Europe and Middle East grew by 55% and up 45% in US. Gross margin came in at 64.7% compared to 65.7% during the last quarter. Decline in gross margin was due to product mix shift and aggressive pricing, some of which was offset by lower costs.
Book-to-bill ratio was above 1.0, which remained above that level for eight quarters in a row. Cisco ended the quarter on a strong financial condition with cash and marketable securities equaling $10.1 billion, up $1.6 billion sequentially.
Cisco experienced strong growth from its service provider segment, which grew by almost 80%, orders from small-to-medium sized business grew by 34% and 33% from its enterprise customers. Cisco's overall revenues grew almost twice as much as the industry average and maintained its leadership position across several product lines. Following the earnings release, Merrill Lynch raised earnings estimate for fiscal 2000 from $0.91 to $0.97 and established preliminary fiscal 2001 earnings estimate of $1.22. Merrill
reiterated buy rating on the stock with a 12-month price target of $70
based on 65 times their calendar 2000 EPS estimate of $1.07.
Technically, shares had been trading in a range of $60-$63 over the past several weeks since reaching a high of $67 in July. The consolidation has helped the stock relieve some of the overbought situation on a near-and-intermediate-term basis. Shares are testing the upper end of the current trading range and a break through this level could carry the stock back up towards its previous high. If overall market continues to rebound after Friday's sold gain, look for an upside breakout.
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Keep an eye on shares of AOL, which appear to be headed towards $100.
Shares acted very well the past few days and participated in the rally.
While recent rebound helped the stock relieve some of the oversold
condition, it would take few more up days before reaching overbought on ashort-term basis. Thus, odds favor the upside over the next few days. AOL has been acting well since management made positive comments in a recent conference call, which brought some stability to the group. This not only helped the stock, but also helped lift the entire group - something to keep an eye on.
Keep an eye on shares of CMGI, which are on the verge of breaking through its downtrend. Shares formed a nice base around $72 from which the stock mounted this rebound. Current pattern suggests that the stock could make a decisive break through this level on way to its next area of solid resistance at $88-$90. Technical indicators are on the neutral side of overbought, which favor higher prices ahead. If overall market remains firm in coming sessions, look for CMGI to move up as well.
Keep an eye on shares of eBay, which had another good day on Friday, rising 5 3/8 to $98. Shares are now up from $72 to almost $100 over the past couple of weeks and relieved some of the oversold situation in the process.
eBay will have to deal with some overhead resistance shortly. The first one is at its 25-day moving average around $100, which the stock could test as early as Monday. If the overall market remains firm on Monday, shares could very well trade above its 25-day moving average on an intra-day basis, but closing above that level might be different proposition.
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