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What Investors Should Expect From Cisco's Q3 Results

What Investors Should Expect From Cisco's Q3 Results

Cisco Systems, Inc. (NASDAQ: CSCO) is all set to release its third-quarter numbers after the bell Wednesday. Kenneth "Ken" Leon, global head of equity research at S&P Capital IQ, was on CNBC recently to provide his perspective on what the results could be like.

Flat Sequentially

"We have a Buy recommendation on Cisco Systems and a $34 target price," Leon said. "Any one quarter is never remarkable for Cisco, since very often the results are calibrated to some degree with the messaging by management. We see this quarter tonight being really flat sequentially, $0.53 a share and then up year-over-year.

"So, the rhythm of the numbers on earnings per share, or even revenues, this is a company that's growing barely low single digit, but they are doing a lot for shareholder value and total return. So, I think the messaging from this management is going to be about execution, as we have the changing of the guard."

Related Link: What Could Be Coming For Cisco, According To Cantor Fitzgerald

He continued, "It's going to move less from vision and more to kind of talking about execution either by geography of markets or by products. Once the new CEO has firm footing with the investment community, then he might become more visionary or even more strategic with mergers and acquisitions."

An Attractive Value Play

Leon was asked if the change of guards also change the old tech persona that Cisco may have. He replied, "I don't think it's necessarily old tech, but separating the two – the company and the stock. The company is a leader and continues to innovate, but that innovation is still, by the law of large numbers, hard to get this to be a double-digit grower of revenue. So, I see it really as an attractive value play," Leon concluded.

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