Two Ways: Cisco Beats the Street
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Shares of Cisco Systems (CSCO) are up in after-hours trading. According to Bloomberg, the world's largest maker of networking equipment reported second-quarter net income above analysts expectations and said it plans to cut $1 billion in costs by early summer.
Profits came in at $1.5 billion, or $0.26 per share, down from $2.06 billion or $0.33 a share a year earlier. Revenues fell to $9.01 billion, slightly below expectations of $9.02 billion.
In a statement, Chief Executive Officer John Chambers said the company displayed "solid financial strength during a period of significant economic challenge." Cisco, he went on, will continue to "gradually decrease" operating expenses "while building even stronger customer relationships to position Cisco for ongoing, long-term market leadership."
Shares were up over 3% to $16.11 as of 4:30.
For more earnings reviews, see Ticker Shock by Glenn Curtis.
From the Bull Pen: Cisco could pave the way for a move higher in Tech Land. Bulls can also consider Apple (AAPL), which could be headed to par ($100). But don't forget a potentially ugly jobs report Friday. Keep your sell stops tight.
From the Bear Cave: The bear case is the disaster in everything consumer-related, notably Costco (COST), Kraft (KFT) and Walt Disney (DIS). It shows the economy is deteriorating at a rapid pace. Aggressive traders can use the Double Short S&P 500 ETF (SDS) on the thesis that we could see a flush below S&P 800 before resuming a significant rally.
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