Cisco Sets 52-Wk High; Strong Earnings Outlook Cited
NEW YORK (Dow Jones)--A recent alliance with U S West
Communications Group (USW), comments from an optimistic president
and anticipation of a solid earnings report all likely sparked shares of Cisco Systems Inc. (CSCO) to reach a 52-week high for a second consecutive session, analysts said.
"I think that the obvious success in the service provider market (illustrated) by the company's announcement is getting people pretty excited," said analyst Stephen Koffler, of Donaldson Lufkin & Jenrette Securities Corp.
Koffler was referring to U S West Communications Group's announcement
Wednesday that it designated Cisco its strategic vendor for data network infrastructure and for resale of customer-premise equipment.
Encouraging words from John Chambers, Cisco's president and chief
executive, could also have pushed shares, Koffler said.
Chambers told Dow Jones he expects the company to become the
industry's No. 1 supplier in a key data communications product category - remote access concentrators - by year-end.
"If they accomplish that, it will be a significant growth driver for the business," said Chris Stix, of Cowen & Co.
Analysts also said investors were probably anticipating a solid
second-quarter earnings report from the San Jose, Calif., provider of
networking products. Cisco is scheduled to report Tuesday after market close.
But, according to other analysts, Cisco in itself has a positive ring to it.
"I think it is one of the leading tech stocks, so the market is moving toward that," said Fahnestock & Co.'s John Duffy, adding that the technology-laden Nasdaq is also doing well, in addition to other stocks such as Bay Networks Inc. (BAY) and 3Com Corp. (COMS).
"People are coming back
Cisco shares rose 1 7/8, or 3%, to close Thursday at 63 3/4, on Nasdaq volume of 20.9 million shares, compared with an average daily turnover of 13.5 million. The shares touched 65 3/8 earlier, breaking a 52-week high of 62 3/8 set Wednesday.
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