Semiconductor manufacturer Cisco Systems, Inc. (NASDAQ:CSCO) is reporting fourth quarter fiscal year 2014 earnings on Wednesday, August 13th, after the close of trading. Analysts have a relatively wide range of expectations for Cisco, but nearly all are expecting reasonably strong results this quarter.

Cisco Systems Logo

J.P.Morgan Cisco Systems preview

J.P.Morgan analysts Rod Hall and colleagues published an investment report on Cisco Systems on Monday, August 11th, reiterating their Underweight rating and $17 price target for the equity.

The JPM analysts explain their point of view in the introduction to the report. “On balance we expect a solid report and potentially a slightly better guide into FQ1. However, we continue to believe that Cisco will find it difficult to maintain switching margins as bare metal/SDN take off in late 2014 and 2015.”

JPM anticipates total routing revenue to decrease by 6.4% year over year in FQ1 ’15 to $1.9 bil, better than -8.7% year over year in FQ4 ’14 and -9.6% year over year in FQ3 ’14.

Hall et al. are projecting total Cisco revenues of $12,132 mil (cons: $12,150 mil, guid: $12.044 mil-$12.293  mil), GM of 61.5% (cons: 61.7%, guid: 61%-62%), EBIT margin of 28.0% (cons: 27.9%, guid: 27.5%-28.5%), and EPS of $0.52 (cons: $0.53, guid: $0.51-$0.53).

Cantor Fitzgerald Cisco Systems preview

Cantor Fitzgerald analyst Brian J. White is more sanguine about Cisco Systems, Inc. (NASDAQ:CSCO)’s prospects this quarter and in the future. White rates the company a Buy with a $31 price target.
He sums up his perspective in the overview of his earnings preview report on Cisco. “We believe the combination of strong execution by Cisco, the benefit of a new product cycle and a trough in the profit cycle (based on our model) are supportive of a continued recovery at the company. At the same time, the stock enjoys an attractive valuation (just under 9x our CY:15 EPS estimate, ex-cash) and a healthy dividend yield of 3%. If Cisco is able to deliver another healthy performance and outlook, we believe the company has the potential to turn more doubters into believers.”
White notes he now thinks Cisco will beat his 4Q:FY14 revenue estimate of $12.03 billion (FactSet consensus of $12.15billion) and surpass his pro forma EPS projection of $0.52 (consensus of $0.53). Cantor’s 4Q:FY14 forecast projects a 4% quarter over quarter sales increase following a strong third quarter. He also highlights that Cisco’s 4Q:FY14 guidance is for  an EPS of $0.51-0.53 and sales slipping 1-3% year over year.