Although Cisco’s (NASDAQ: CSCO) fourth-quarter results released Feb. 21 beat consensus estimates with earnings coming in at 47 cents a share compared with analysts’ estimates or 46 cents, its poor showing in emerging markets is an Achilles’ heel for the networking giant’s future revenue growth.
Net Earnings and Gross Margins Dropping
Another disturbing trend brought to light in the San Jose-based company’s financials is the fact that it’s fourth-quarter net earnings dropped by 7% along with its gross margins, declining 19% as a result of lagging sales.
Cisco Prices $8 Billion of Senior Unsecured Notes
In other news, Cisco announced Feb. 24 he pricing of seven series of senior unsecured notes for an aggregate principal amount of $8 billion. The offering is expected to close on March 3, 2014.
Of these notes, $850 million will mature in September 2015 and will bear interest at a floating rate equal to three-month LIBOR plus 5 basis points, $1 billion will mature in March 2017 and will bear interest at a floating rate equal to three-month LIBOR plus 28 basis points, $2.4 billion will mature in March 2017 and will bear interest at an annual rate of 1.100%, $500 million will mature in March 2019 and will bear interest at a floating rate equal to three-month LIBOR plus 50 basis points, $1.75 billion will mature in March 2019 and will bear interest at an annual rate of 2.125%, $500 million will mature in March 2021 and will bear interest at an annual rate of 2.900% and $1 billion will mature in March 2024 and will bear interest at an annual rate of 3.625%.
Cisco intends to use the net proceeds from this offering for general corporate purposes, including (i) to repay $3.75 billion in aggregate principal amount of its outstanding senior unsecured notes, consisting of $2.0 billion of its 1.625% senior notes and $1.25 billion of its floating rate notes, each due March 2014 and $500 million of its 2.90% senior notes due November 2014 and (ii) to return capital to shareholders pursuant to its previously-announced capital allocation strategy through the repurchase of shares of its common stock and the payment of cash dividends.
Of the 26 analysts covering Cisco, 17 recommend a “strong buy,” 1 recommends a “buy,” 7 recommend a “hold” and 1 recommends a “sell.”
CSCO’s share value closed at $22.12 on Feb 24, down 1 cent, from its close of $22.13 the previous day.
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Positive News Fuels Share Value
8x8 Inc. (NASDAQ:EGHT), a technology company that provides cloud-based services, share value has been nudging upward on a spate of positive news.
On Feb. 19, 8x8 Inc. announced that announced that iCruise.com, one of the largest cruise sellers in the U.S., has deployed 8x8 Virtual Office and Virtual Contact Center services in its corporate headquarters and 60+ remote locations, creating a scalable, secure and reliable unified communications platform with built in disaster recovery for its widely distributed organization.
The Santa Clara, Calif.-based company announced Feb 13 that George Best Belfast City Airport, a regional airport serving a range of destinations throughout the UK and Ireland and Northern Ireland, has replaced its traditional phone system with business VoIP and cloud-based unified communications services from 8x8 Solutions
Finally, on Feb. 11 8x8 announced that it has been selected by Rubicon Project, operator of one of the advertising industry's largest independent real-time trading platforms for digital advertising, to provide 8x8 Virtual Office business VoIP, unified communications and mobile solutions to its nine international locations
Although the deals appear to be good news, the terms of the deals were not released.
Of the nine analysts covering 8x8, 6 recommend a “strong buy,” 2 recommend a “buy” and 1 recommends a “hold.”
EGHT’s share value closed at $9.97 on Feb 24, up 17 cents, from its close of $9.75 the previous day.
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Better than Expected Quarter
Meanwhile, EMCORE Corp. (NASDAQ:EMKR) stock volume soared Feb. 24, with 575,366 shares changing hands, nearly three times its three-month average volume of 197,841 shares.
The surge in volume and share price is probably the residual effect of the Somerset, NJ-based semiconductor maker’s positive quarterly report released Feb. 5.
Beat Consensus Forecasts
The company reported ($0.02) earnings per share for the quarter, beating the analysts’ consensus estimate of ($0.08) by $0.06. The company reported revenue of $44.21 million for the quarter, compared to the consensus estimate of $43.69 million.
Of the three analysts that cover EMCORE Corp., 2 recommend a strong buy while 1 recommends a “buy.”
EMKR’s share value closed at $5.11 on Feb 24, up 19 cents, from its close of $4.92 the previous day.
Find out what could be the best investor’s move when it comes to EMKR by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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