Cisco Systems Earnings Preview

Cisco Systems CSCO will be releasing its next round of earnings this Thursday, November 12. For all of the relevant information, here is your guide for Thursday's Q1 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Based on management's projections, Cisco Systems analysts model for earnings of $0.7 per share on sales of $11.85 billion. Cisco Systems reported a profit of $0.84 per share when it published results during the same quarter last year. Sales in that period totaled $13.16 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street consensus estimate for earnings would represent a 16.67% decrease for the company. Sales would be down 9.95% from the year-ago period. Here is how the Cisco Systems's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Cisco Systems were trading at $38.72 as of November 10. Over the last 52-week period, shares are down 13.17%. Given that these returns are generally negative, long-term shareholders are probably down going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Cisco Systems is scheduled to hold the call at 16:30:00 ET and can be accessed here.