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Updates on Jubak's Picks Stocks
I'll take Cisco's word for it
Even Cisco Systems' (CSCO) biggest fans were surprised by the company's most-recent quarter. After the market closed
Feb. 8, the company announced that, for the 11th consecutive quarter, it had beaten Wall Street estimates by a penny.
(Excluding charges, Cisco earned 25 cents a share for the period.) Revenue, however, was the big surprise, coming in at $4.35 billion for the quarter, a 53% increase over the $2.85 billion recorded in the same period a year earlier, and a whopping $200 million above the most-optimistic estimate on Wall Street. Gross margins, a key measure for Cisco since the company is feeling price pressure in several core businesses, remained rock-solid at about 65%. The company also announced a 2-for-1 stock split payable March 22. I'm raising my target price on Cisco to $162 a share by June from the previous $120 target for April.
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Research Wizard
Stocks moving at the speed of light
In its earnings conference call with Wall Street analysts, Cisco Systems confirmed something that I've believed for months now. Nortel Networks (NT), and not Lucent Technologies (LU), is the company that presents the biggest challenge to Cisco. "We've seen Lucent slow down," says Cisco Executive Vice President Don Listwin, and Nortel has picked up momentum, especially in the optical networking market. I'm raising my target price on Nortel Networks to $145 by June from the previous $125. |
