Cisco Systems (CSCO) to Report Q3 Earnings: Factors to Note

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Cisco Systems CSCO is set to release third-quarter fiscal 2022 results on May 18.

The company anticipates third-quarter fiscal 2022 revenues to improve in the range of 3-5% on a year-over-year basis. Non-GAAP earnings are anticipated to be between 85 and 87 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $13.33 billion, indicating an increase of 4.10% over the year-ago quarter’s reported figure.

The consensus mark for earnings has been stable in the past 30 days at 86 cents per share. The figure suggests growth of 3.61% from the prior-year quarter’s levels.

Cisco Systems, Inc. Price and EPS Surprise

Cisco Systems, Inc. Price and EPS Surprise
Cisco Systems, Inc. Price and EPS Surprise

Cisco Systems, Inc. price-eps-surprise | Cisco Systems, Inc. Quote

Let’s see how things have shaped up for Cisco prior to this announcement.

Factors Likely to Have Influenced Q3 Results

Cisco’s extensive product portfolio and varied end-user base are expected to have positively contributed to the fiscal third-quarter top-line growth.

Accelerated digital transformation taking place globally, and the need to build a safe hybrid-work environment are driving demand for Cisco’s solutions. Robust adoption of the company’s software and subscription-based offerings is likely to have acted as a tailwind.

Cisco’s revenues are likely to have benefited from momentum in web security, identity and access, as well as in advanced threat and unified threat management security solutions, owing to higher cybersecurity spending on the back of continued remote/hybrid work set up globally.

Increasing adoption of the SecureX offering is likely to have contributed to the to-be-reported quarter’s performance.

Higher bandwidth requirements by customers are expected to have driven demand for Acacia’s optical solutions.

Momentum in Cisco’s video-conferencing application — Webex platform — induced by the coronavirus-induced remote-work setup and accelerated implementation of flexible work model is expected to have supported fiscal second-quarter performance.

However, higher component costs are expected to have hurt gross margin in the to-be-reported quarter.

Increasing investments in portfolio expansion, product enhancements and acquisitions amid stiff competition in the networking infrastructure market are expected to have dragged down margin expansion in the fiscal third quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Cisco has an Earnings ESP of 0.84% and carries a Zacks Rank #2 currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

Wix.com WIX has an Earnings ESP of +15.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

WIX is scheduled to release first-quarter 2022 results on May 16.

Dell Technologies DELL has an Earnings ESP of +0.72% and a Zacks Rank #3.

DELL is scheduled to release first-quarter fiscal 2023 results on May 26.

Keysight KEYS has an Earnings ESP of +0.48% and a Zacks Rank #3.

KEYS is scheduled to release second-quarter fiscal 2022 results on May 17.


Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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