17 de August de 2018

Cisco Aims to Keep Revenue Growth Rolling

Cisco Systems Inc. is scheduled to report its fiscal fourth-quarter results after the market closes on Wednesday. Here’s what to watch.

EARNINGS FORECAST: Cisco is expected to report adjusted per-share earnings of 69 cents, according to analysts surveyed by SP Global Market Intelligence. That would be up from adjusted earnings of 61 cents a share a year earlier. Adjusted results exclude some taxes and costs related to acquisitions.

Article source: https://www.wsj.com/articles/cisco-aims-to-keep-revenue-growth-rolling-1534325401

Cisco Earnings Preview: 3 Quarters of Growth

Networking hardware company Cisco Systems (NASDAQ:CSCO) is set to report its fiscal fourth-quarter results after the market closes on Aug. 15. Revenue is expected to grow for the third straight quarter, with adjusted earnings following suit. The company has benefited from strong adoption of its subscription-based Catalyst 9000 switching platform, as well as double-digit growth in applications and security. Those trends should continue in the fourth quarter.

What analysts are expecting

Cisco expects its fourth-quarter revenue to grow by 4% to 6% year over year. The average analyst estimate calls for revenue of $12.77 billion, representing growth of 5.2%. Cisco’s guidance includes the expectation that its routing and service provider video businesses will continue to show some weakness, with the rest of portfolio picking up the slack.

Cisco’s Catalyst 9000 switches. Image source: Cisco.

The Catalyst 9000 platform will be a key driver of this growth. CFO Kelly Kramer discussed demand for the company’s newest switches in the third-quarter earnings call:

…in the Cat 9K, the demand is great. We have fantastic demand. We are taking orders like crazy and there’s great adoption out there by our customers that we don’t see slowing down, so we feel great about that. But again, there’s a lot of moving parts and we’ll take it one quarter at a time.

Cisco expects its non-GAAP earnings per share to come in between $0.68 and $0.70 in the fourth quarter. That range straddles the average analyst estimate of $0.69 per share, and it’s up from $0.61 per share in the prior-year period.

Share buybacks will act as a significant driver of earnings growth, thanks to the company’s massive $25 billion buyback program announced earlier this year. The company has spent more than $11 billion on share buybacks in the first nine months of the fiscal year, and rapid-fire buybacks will likely continue until the $25 billion authorization is exhausted. Cisco’s third-quarter diluted share count was down about 4% from the prior-year period.

Security growth

Cybersecurity is one of Cisco’s long-term growth engines. The business is small right now — the $1.73 billion in security revenue through the first nine months of the fiscal year accounted for less than 5% of Cisco’s total revenue. But it’s growing much faster than the company as a whole, racking up 11% year-over-year growth in the third quarter.

Acquisitions are driving some of that growth, and Cisco isn’t taking its foot off the gas on that front. The company announced the $2.35 billion acquisition of Duo Security earlier this month. Duo focuses on unified access security and multifactor authentication delivered through the cloud, and Cisco plans to integrate Duo’s products with its network, device, and cloud security platforms.

The Duo acquisition comes after a handful of other security acquisitions in the past few years, including Observable Networks, CloudLock, Lancope, Portcullis, and OpenDNS. Cisco has also made plenty of acquisitions outside of security, in areas including artificial intelligence and contact center solutions.

CEO Chuck Robbins explained the company’s security success in the third-quarter earnings call:

I think that as you look at the architecture that we have, which extends from email to end points, to the network, to the cloud, and then has this massive state machine where we can correlate threats and then dynamically defend, it’s a unique proposition. We say that we have this integrated architecture, but also best-of-breed products. Where we are convincing customers that the architecture is right, then we’re winning.

Is Cisco a good investment?

Shares of Cisco may jump up or down depending on its fourth-quarter results, but day-to-day fluctuations shouldn’t matter to long-term investors. Based on the average analyst estimate for full-year non-GAAP earnings, the stock trades at a price-to-earnings ratio of about 17. Add in a dividend yield of about 3%, and you have a reasonably priced dividend stock.

Cisco’s core switching and routing businesses are sensitive to the state of the global economy. If customers start delaying purchases due to uncertainty or an economic slowdown, it will hurt the company’s results. But in the long run, I think Cisco’s dominance of the switching and routing market and the growth potential of its smaller businesses like security make it a solid investment.

Article source: https://www.fool.com/investing/2018/08/14/cisco-earnings-preview-3-quarters-of-growth.aspx

​Cisco patches router OS against new crypto attack on business …

Cisco has released a patch for its widely-used IOS and IOS XE switch and router software as researchers plan to reveal a flaw in the Internet Key Exchange (IKE) protocol used to setup IPSec-protected VPNs.

The networking and security giant released the patches ahead of this week’s 27th USENIX Security Symposium in Baltimore, where researchers will present new attacks on IPsec IKE that could threaten large VPNs used, for example, by industrial information exchanges and wireless carrier backhaul running on Cisco kit.

The attacks were found by: Dennis Felsch, Martin Grothe, and Jörg Schwenk from Germany’s Ruhr-University Bochum; Adam Czubak and Marcin Szymanek, University of Opole in Poland.

The attack is possible due to reusing a key pair across the first and second versions of the IKE key exchange protocol, IKEv1 and IKEv2, and would allow an attacker to impersonate a network or carry out a man-in-the-middle attack against two parties.

SEE: 10 ways to raise your users’ cybersecurity IQ (free PDF)

“[W]e show that reusing a key pair across different versions and modes of IKE can lead to cross- protocol authentication bypasses, enabling the impersonation of a victim host or network by attackers,” the group explain in a paper.

“We exploit a Bleichenbacher oracle in an IKEv1 mode, where RSA encrypted nonces are used for authentication. Using this exploit, we break these RSA encryption based modes, and in addition break RSA signature based authentication in both IKEv1 and IKEv2.

“Additionally, we describe an offline dictionary attack against the PSK (Pre-Shared Key) based IKE modes, thus covering all available authentication mechanisms of IKE.”

As they note, even though IKEv2 superseded IKEv1, both can be implemented in all major operating systems and network devices, like switches and firewalls. They also found the same IKE flaws in equipment from rival network gear makers, Huawei, Clavister and ZyXEL. This included Huawei’s Secospace USG2000 series firewall.

Along with Cisco’s patch for CVE-2018-0131 affecting IOS and its Linux-based IOS XE software, new firmware that addresses the attack have been released by Huawei, Clavister, and ZyXEL, according to the researchers.

Cisco has rated the bug as a medium severity issue in its advisory where it notes that its QNX-based IOS XR is not affected. The issue only affects IOS, the most widely deployed software for Cisco switches and routers, and IOS XE software configured with the “authentication rsa-encr” option.

“A vulnerability in the implementation of RSA-encrypted nonces in Cisco IOS Software and Cisco IOS XE Software could allow an unauthenticated, remote attacker to obtain the encrypted nonces of an Internet Key Exchange Version 1 (IKEv1) session,” explained Cisco.

“The vulnerability exists because the affected software responds incorrectly to decryption failures. An attacker could exploit this vulnerability sending crafted ciphertexts to a device configured with IKEv1 that uses RSA-encrypted nonces. A successful exploit could allow the attacker to obtain the encrypted nonces.” Cisco said it was not aware of any malicious use of the vulnerability.


Article source: https://www.zdnet.com/article/cisco-patches-router-os-against-new-crypto-attack-on-business-vpns/

Bharat Electronics Limited (BEL) to fill Senior Engineer, Deputy …

BEL Recruitment 2018: All the candidates are requested to apply through the prescribed format latest by August 25.

Article source: https://www.thestatesman.com/books-education/bharat-electronics-limited-bel-to-fill-senior-engineer-deputy-engineer-posts-apply-online-at-bel-india-in-1502673168.html

Cisco patches IOS in response to boffins’ IKE-busting breakthrough

Cisco has pushed out an update for its internetwork operating system (IOS) and IOS XE firmware in advance of a Usenix presentation on circumventing cryptographic key protocol.

The networking behemoth is advising all customers running hardware that uses IOS and IOS XE to get the updates that address CVE-2018-0131, a security bypass vulnerability stemming from a weakness in the Internet Key Exchange (IKEv1) protocol.

Researchers Dennis Felsch, Martin Grothe, Jörg Schwenk, Adam Czubak, and Marcin Szymanek from Ruhr-University Bochum and University of Opole found [PDF] that an attacker could contact a device with ciphertext requests that, under the right circumstances, could cause the target device to disclose the encrypted nonces (single-use numbers for encryption keys) and potentially lead to the keys being broken.

The group, who plan to share their findings later this week at the conference, wrote that “reusing a key pair across different versions and modes of IKE can lead to cross-protocol authentication bypasses, enabling the impersonation of a victim host or network by attackers.”

Woman says oops after data breach... or spome other mistake, possibly. Illustration by Shutterstock/sergey sobin

Cisco let an SSL cert expire in its VPN kit – and broke network provisioning brokers


The attack would potentially be carried out either by eavesdropping on IP sessions or by performing a man-in-the-middle compromise and injecting code into packets.

The researchers say that, by deliberately sending bad cipher requests to the vulnerable machines, they could receive enough data to create a type of Bleichenbacher’s Oracle [PDF] attack on the keys. This would, given enough time, would potentially allow the attacker to decrypt shared keys and get around encryption protections.

The researchers noted that they have already disclosed their findings to Cisco and other vendors impacted by the issue, and all are believed to have issued patches for vulnerable products prior to the publication of the paper.

Cisco says in its advisory that, short of moving off of IKEv1, there are no workarounds for the vulnerability. Switchzilla is advising anyone using an IOS or IOS XE device that is configured with the ‘authentication rsa-encr’ option turned on to update their firmware and make sure they have the patched IOS version.

The latest available version will vary based on device and model, but in general IOS versions 15.5(3)M7.2 and later will be protected. ®

Following Bottomline’s journey to the Hybrid Cloud

Article source: https://www.theregister.co.uk/2018/08/14/cisco_patches_ios/

How to Pitch Your Boss on Paying for Your Next Certification

Written by Mary Kyle

Published: 13 August 2018

Certification is a great way to keep your IT skills current, as well as gather and absorb new information. It can be costly, however, to train for and pass an exam. Where can you turn for financial assistance?

Continual learning is an important part of any IT career.There is certainly no doubt that we live in an age of innovation and technological advancement. From the Internet of Things (IoT) to artificial intelligence (AI) to self-driving autos and beyond, one only has to look around to observe seemingly daily advances in technology.


Gone are the days when a college diploma (or in some cases, no diploma), coupled with a few years of real-world experience, prepared and equipped you with the skills necessary to enjoy a successful lifelong career. Today, the skills you learn in the first years of your training may well be obsolete by the time you hang that shiny new diploma on the wall.


Given the speed at which innovations are occurring, it’s even possible that professionals may be faced with scenarios where the technology they’re called upon to work with didn’t exist at the time that they underwent training.


To maintain career viability, it’s almost a necessity to adopt an attitude of lifelong learning and understand that, while you may be prepared to meet the requirements of your clients and employer today, you may not be prepared to face tomorrow’s challenges. Post-graduation training is a fact for successful professionals.


Stay Current … with Help from Your Boss


When it comes to ongoing training, many professionals look to certifications and their associated training to quickly learn new skills and maintain market viability. In some cases, it’s not uncommon for employers to encourage, or even require, employees to obtain or maintain certain certifications as a condition of employment or continued employment.


Unfortunately, professional level certifications aren’t necessarily affordable. Prices for certification exams and related training can vary widely, ranging from nominal fees to several thousands of dollars for more advanced certifications.


By way of example, the Cisco Certified Network Professional (CCDP) Data Center requires candidates pass four separate exams ($300 each) to earn the certification. The CCNP Data Center requires the CCNA Data Center as a prerequisite (two more exams). Recommended training runs approximately $4,400 per five-day course. It’s easy to see how certification fees could easily become cost prohibitive.


While not all certifications are this pricey, there are certainly instances when even nominal certification fees may be out of the financial reach of some professionals. Many professionals turn to employers for assistance in paying for certifications. According to Pearson VUE’s The Value of IT Certification Survey 2017, 55 percent of respondents reported that their employers paid for certifications.


Even so, it can be daunting to ask your employer for funding. Fortunately, there are some simple principles you can follow to help you prepare and present your request.


1. Change your focus


While it may seem counterintuitive, certification isn’t about you. It’s about the benefit and business value to your organization. The benefits to you as an individual — positive impact on your career, salary increases, promotion potential, increased opportunities — are understood.


Your employer needs to understand how paying for your certification benefits the organization as well as its clients and customers. Be prepared to explain what benefit or gain the organization will reap from their investment in growing your skills.


Article source: http://www.gocertify.com/articles/how-to-pitch-your-boss-on-paying-for-your-next-certification

Cisco Says Its Open vRAN Alliance Is Behind the Latest xRAN …

Cisco Says its Open vRAN Alliance Is Behind the Latest xRAN Forum SpecSue Marek

Cisco says its Open vRAN Alliance, which debuted last February at Mobile World Congress 2018, is playing a key role in the advancement of vRAN standards by working with other groups like the xRAN Forum.

In a blog post, Mark Grayson, a Cisco distinguished consulting engineer in Cisco’s Mobile Internet Technology Group CTO’s office, said that the Open vRAN Alliance was created to develop a new open and modular RAN architecture using General Purpose Processing Platforms (GPPP) and disaggregated software. This helped the xRAN Forum develop its latest management plane (M-Plane) specification.

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The xRAN Forum, which is in the process of merging with China’s C-RAN Alliance to form the O-RAN Alliance, recently announced that it had developed the M-Plane specification to allow the baseband unit and the radio unit to exchange information about things like configuration. According to Dr. Sachin Katti, a professor at Stanford University who heads up the xRAN Forum, this spec is necessary so that radios from different vendors can work together and set parameters.

M-Plane is based upon NETCONF/YANG, which is an open source configuration language that can support both traditional and hybrid deployment models. Cisco’s Grayson said that using YANG models will help ensure multi-vendor interoperability, make it easier to manage software, and will enable operators to validate the configuration data of 5G radio units. He also said that all members of Cisco’s Open vRAN Alliance have endorsed this specification. Those members include Intel, Mavenir, Altiostar, Aricent, Phazr, Red Hat, and Tech Mahindra. Indian operator Reliance Jio is also involved in the group.

In an email exchange with Cisco, the company told SDxCentral that the vRAN Alliance’s work is complementary to standards groups like the xRAN Forum and the 3GPP, adding that there is so much work needed to architect and implement an open vRAN solution that standards bodies alone can’t do it all. “We sit on both sides of the standards process. We are on the front end of it, working with industry partners — customers and vendors, to define and drive standards through the relevant bodies such as xRAN/O-RAN, 3GPP, etc.,” the company said. “We also sit on the other side of it, like any other vendor(s) would — building solutions and adopting the standards that are established.”

Article source: https://www.sdxcentral.com/articles/news/cisco-says-its-open-vran-alliance-is-behind-the-latest-xran-forum-spec/2018/08/

Factors Setting the Tone for Cisco’s (CSCO) Q4 Earnings

Cisco Systems Inc. (CSCO Free Report) is scheduled to report fourth-quarter fiscal 2018 earnings on Aug 15. The company outpaced the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while matching the estimates once. This resulted in an average positive surprise of 2.5%.

In the third quarter, the company delivered non-GAAP earnings of 66 cents per share coming ahead of the Zacks Consensus Estimate by a penny. Further, the figure rose 10% from the year-ago quarter.

Revenues increased 4.4% year over year to $12.463 billion and marginally surpassed the Zacks Consensus Estimate of $12.421 billion. Acquisitions contributed 120 basis points (bps) to revenue growth in the last reported quarter.

Strength witnessed in company’s Security and Applications segments drove year-over-year growth. Order strength and improving traction of the subscription-based model were other tailwinds.

Guidance Estimate

For fourth-quarter fiscal 2018, revenues are expected to grow 4-6% on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $12.77 billion, representing year-over-year growth of 5.2%.

Non-GAAP earnings are anticipated between 68 cents and 70 cents per share. The Zacks Consensus Estimate for earnings is at 69 cents, translating to year-over-year growth of 13.1%.

Shares of the company have gained 14.3% on a year-to-date basis, outperforming the industry’s rally of 13%.

Factors likely to influence Fourth-Quarter results

Application software businesses such as AppDynamics and Jasper which are reported under company’s Applications segment, witnessed significant traction. Additionally, UC infrastructure and TelePresence endpoints also drove collaboration revenue growth.

Applications (10.5% of third-quarter revenues) increased 19% from the year-ago quarter to $1.31 billion.

Cisco recently integrated its Spark with Webex Platform which enhanced Webex Meeting and enabled it to introduce Webex Teams, further strengthening the company’s collaboration portfolio.

With Webex Meetings, Webex Devices and Webex Teams yielding results, we believe Cisco is well poised to capitalize on the emerging AI based enterprise applications.

Moreover, impressive performance of Security segment deserves a special mention. Solid demand witnessed by web security, unified threat and advanced threat solutions remain segment’s growth drivers.

Security (4.7% of revenues) climbed 11% to $583 million. The results were noticeable as deferred revenues surged 38% from the year-ago quarter.

Cisco’s AI-driven Talos intelligence platform blocks 20 billion threats per day. Recently, Talos unit identified that almost 500K storage devices and routers across 54 countries are infected with malware similar in nature to the one used to attack Ukraine.

The company’s efforts to leverage machine-learning to deploy security platforms to mitigate online risks on a real-time basis bode well.

The Zacks Consensus Estimate for Applications and Security is pegged at $1.414 billion and $614 million, respectively.

Infrastructure Platforms (57.5% of total revenues) comprise Switching, NGN routing, Wireless and Data Center solutions, inched up 2% from the year-ago quarter to $7.16 billion.

The year-over-year increase was primarily due to robust growth across switching, wireless and data center business. Switching revenues increased witnessed strong growth across campus and data center. Adoption of new campus switch, Cat9K was impressive.

Further, wireless revenues grew on the back of company’s Wave 2 offerings and Meraki solution. Robust demand for the HyperFlex data-center solution drove data center’s double-digit growth.

Cisco’s ACI solution continues to witness traction. The company believes that ACI customers are gaining from increased business agility owing to network automation, simplified management and improved security features of the product. Management remains optimistic on the newly introduced ACI SDN offering.

The Zacks Consensus Estimate for Infrastructure Platforms is currently pegged at $7.269 billion.

Focus on Enhancing Cloud Offerings Bodes Well

Cisco recently announced it plans to acquire Burlingame, CA-based July Systems. The private company provides cloud-based mobile application platform.

With this buyout, Cisco will strengthen its Enterprise Wi-Fi platform by bolstering advanced indoor-based location services capabilities.

July Systems boasts of valuable customers, comprising SAP SE (SAP Free Report) , lululemon athletic, among others. The proficiency that July Systems brings on board will power Cisco’s intent-based networking movement.

These factors are likely to boost top-line growth in the to-be-reported quarter.

Underlying Risks

The company continues to face intense competition from Arista Networks which recently announced its intention of manufacturing switches that connect campus networks. This move of Arista is likely to hurt Cisco as it holds a dominant position in that market.

Moreover, ongoing transition to subscription-based model remains a headwind at least in the near term.

What the Zacks Model Unveils?

Our proven model shows that Cisco is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cisco has a Zacks Rank #3 and an ESP of +0.07%.

Other Stocks With a Favorable Combination

Here are some other companies you may want to consider as our model shows that these too stocks have the right combination of elements to post an earnings beat:

Palo Alto Networks, Inc. (PANW Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CDK Global, Inc. (CDK Free Report) has an Earnings ESP of +0.24% and a Zacks Rank #3.

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Article source: https://www.zacks.com/stock/news/317559/factors-setting-the-tone-for-ciscos-csco-q4-earnings

Sify and Cisco unveil ‘Software Defined WAN’ for Indian Enterprises

Santa Clara, California, Aug. 13, 2018 (GLOBE NEWSWIRE) — Sify Technologies Limited (NASDAQ:SIFY), headquartered in Chennai, India, an ICT Solutions and Services leader in India, and Cisco Systems, Inc. (NASDAQ:CSCO), today announced the launch of their Managed and Secure Software-defined Wide Area Network (SD WAN) service, built on the Cisco SD-WAN platform.

Sify’s managed SD-WAN service will be the key driver for delivering a “Hybrid WAN for companies adopting Hybrid IT” in the Indian market. Sify’s SD WAN is offered as a managed service built on robust technology, giving customers the flexibility to smoothly transition from their existing network to a fully functional and secure SD WAN platform with minimal disruption, thereby giving enterprises the benefits of agility, flexibility, application-centricity and predictable network performance.

Elaborating on the partnership, Kamal Nath, CEO, Sify Technologies said, “Our software-defined Network services is an important part of our comprehensive go-to-market strategy as an enabler to Cloud adoption and underpins our Cloud@Core vision. As customers continue to move critical workloads to both the Public and Hybrid cloud, SD WAN becomes a critical part of the network strategy for them. This partnership with CISCO gives Sify the best-in-class technology to support its services strategy to help accelerate digital transformation services for Enterprises in India.”

Sanjay Kaul, Managing Director, Service Provider Business, Cisco India SAARC said, “The network is the most critical element in an organization’s digital transformation journey. We are excited to partner with Sify Technologies to drive their Cloud business through Cisco SD-WAN to offer a flexible, highly secure and reliable service to its enterprise customers. Cisco SD-WAN can be deployed over any type of connection, and helps commission new services across hybrid networks and can reduce costs by nearly 70% over a five-year horizon. It also provides secure connections to applications as multilayer security encrypts all data from the WAN edge to the cloud.”

Sify’s Managed SD Wan service is now available for enterprises in India to adopt. The service has been launched after successful trials with customers.

About Sify Technologies:
Sify is the largest ICT service provider, systems integrator, and all-in-one network solutions company on the Indian subcontinent. We have also expanded to the United States, with headquarters in the heart of California’s Silicon Valley.Over 8500 businesses have become Sify customers. We also partner with other major network operators to deliver global network solutions. Our customers can access Sify services via India’s largest MPLS network. Among the very few Enterprise class players in India, Sify, today has presence in more than 1550 cities in India and in North America, the United Kingdom and Singapore.

Sify, www.sify.com, Sify Technologies and www.sifytechnologies.com are registered trademarks of Sify Technologies Limited.

Forward Looking Statements:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Sify undertakes no duty to update any forward-looking statements.

For a discussion of the risks associated with Sify’s business, please see the discussion under the caption “Risk Factors” in the company’s Annual Report on Form 20-F for the year ended March 31, 2018, which has been filed with the United States Securities and Exchange Commission and is available by accessing the database maintained by the SEC at www.sec.gov, and Sify’s other reports filed with the SEC.

About Cisco:
Cisco (NASDAQ:CSCO) is the worldwide technology leader that has been making the Internet work since 1984. Our people, products, and partners help society securely connect and seize tomorrow’s digital opportunity today. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco’s trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

For further information, please contact: 

Praveen KrishnaSify Technologies Limited
praveen.krishna@sifycorp.comTaylor HassmanCisco
thassman@cisco.comNikhila Kesavan
20:20 Media
nikhila.kesavan@2020msl.comShiwei Yin
Grayling Investor Relations

Source: Sify Technologies Limited

Article source: https://www.nasdaq.com/press-release/sify-and-cisco-unveil-software-defined-wan-for-indian-enterprises-20180813-00508

Cisco earnings: Duo acquisition is nice, but what have you done for …

Cisco Systems Inc. will wrap up its fiscal year with an earnings report that could have investors focusing on the future instead of the results.


CSCO, +0.00%

 is scheduled to report fiscal fourth-quarter earnings on Wednesday after the closing bell, but those earnings aren’t what investors have focused on lately. Drawing the spotlight away was Cisco’s recent announcement that it is acquiring Duo Security for $2.35 billion, a move that drew accolades from many analysts

Cowen analyst Paul Silverstein, who has an outperform rating and a $51 price target said in a note that “Duo should further improve Cisco’s security value proposition, shift to intent-based networking and transition to a more multi-cloud-centric, annual subscription, recurring revenue model.”

Piper Jaffray analyst James Fish, who has an overweight rating on Cisco and a $50 price target, noted: “We believe network security providers need to own the identity space, as this is the next ‘platform’ in security.”

Any effects on the security business won’t be felt until next year, however, so Cisco’s forecast for the current fiscal year will likely be parsed more than the numbers it produced in the fourth quarter, when European sales may have come in weak. Oppenheimer analyst Ittai Kidron, who has an outperform rating and a $50 price target on Cisco, expects the July-ending quarter to be “a transitional bump in the road.”

Read: Amazon denies it will challenge Cisco with switch sales

“Based on our U.S./European channel checks (30 interviews), we expect Cisco to report revenue in line with to potentially slightly below the July-quarter consensus,” Kidron said in a note, citing soft European demand.

“Our view takes into account recent weak service provider Capex trends, background noise (Europe, tariffs, GDPR, etc.), and our enterprise checks which suggest possible softness,” Kidron said. “That said, we’re more positive on the October quarter, where checks point to building order pipelines and some recovery in European demand.”

What to expect

Earnings: Of the 27 analysts surveyed by FactSet, Cisco on average is expected to post adjusted earnings of 69 cents a share. The company forecast earnings of 68 cents to 70 cents a share. Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages, buy-side analysts and others, calls for earnings of 70 cents a share.

Revenue: Wall Street expects revenue of $12.77 billion from Cisco, according to 25 analysts polled by FactSet. That’s up slightly from the $12.70 billion forecast at the beginning of the quarter. Cisco predicted revenue of $12.62 billion to $12.86 billion. Estimize expects revenue of $12.78 billion.

Analysts surveyed by FactSet expect product revenue to rise 5.5% to $9.53 billion. Of that, analysts expect $7.28 billion in infrastructure platform revenue, $1.4 billion in applications revenue, $614.8 million in security revenue and $255.9 million in sales of “other products.” Service revenue is expected to rise 3.5% to $3.22 billion from a year ago.

Stock movement: Cisco shares fell after its previous earnings report after services revenue came in light and have yet to recover.

Since its earnings report in mid May, Cisco shares are down 3.1%, while the Dow Jones Industrial Average

DJIA, -0.77%

 , which counts Cisco as a component, is up 2.2%, the SP 500 index

SPX, -0.71%

 is up 4.1%, and the tech-heavy Nasdaq Composite Index

COMP, -0.67%

 is up 6% in the same period.

What analysts are saying: Of the 29 analysts who cover Cisco, 21 have buy or overweight ratings, eight have hold ratings and no analysts have sell or underweight ratings, with an average price target of $49.26, or nearly 13% above Thursday’s closing price.

Morgan Stanley analyst James Faucette, who has an overweight rating and a $48 price target on Cisco, sees the company’s new line of network switches as a major driver.

“Our reseller contacts saw Cisco outperform primarily on campus and data center switching, followed by security and wireless spend,” Faucette said. “On campus, the Catalyst 9000 continues to drive momentum, and now halfway through the year, resellers are feeling increasingly confident in the CY19 pipeline.”

Cisco’s Catalyst 9000 line of network switches are expected to gain traction with businesses that are increasing their capital infrastructure spending, along with the multiyear software contracts required to operate the switches.

Raymond James analyst Simon Leopold wrote Friday that he was tempted to raise estimates ahead of earnings due to Catalyst 9000, the security business and other strengths, but was held back by “the headwinds from the software pivot, poor visibility, and component shortages.”

“Following three consecutive quarters posting year over year growth, we continue to believe that Cisco’s revenue headwinds, driven by a shift from a perpetual to a subscription based business could be turning the corner, and see potential upside to earnings driven by better revenue growth, healthier margins, and share buybacks,” wrote Leopold, who has an outperform rating and $50 target price on the stock.

Marketwatch staff writer Jeremy C. Owens contributed to this article.

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Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski.

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Article source: https://www.marketwatch.com/story/cisco-earnings-duo-acquisition-is-nice-but-what-have-you-done-for-us-lately-2018-08-10