Barclays Boosts Cisco Systems Estimates on "Recovery in Europe/APAC" (CSCO)

11/5/2009-Wednesday evening, Cisco Systems (NASDAQ:CSCO) reported Q3 EPS of 36 cents, ex-items, topping consensus estimates of 31 cents.

Meanwhile, net sales in the quarter fell 12.7% year-over-year to $9.02 billion, and came in short of consensus estimates of $8.74 billion.

As a result of its better-than-expected results, Barclays issued a letter to clients raising the high end of its estimates. BarCap analyst, Jeff Kvaal said that strong sales of $9.0 billion easily topped guidance of $8.8 billion, driven by US enterprise bookings, which grew 30% QoQ, as well as strength in US carrier, APAC, and parts of Europe.

In addition, a "robust" gross margin of 66% beat BarCap's estimated 65% margin due to lower component costs and fewer discounts.

Kvaal added that Cisco's management offered better than seasonal sales guidance (up 2 aEUR" 5% vs. 3%).

Kvaal concluded by saying that management "restrained optimism for F2H," therefore BarCap boosted its high end CY2010 EPS from $1.54 to $1.57.

Barclays analyst Jeff Kvaal offered this concluding statement, "We believe further EPS upside is likely from recovery in Europe/APAC plus conservative guidance."

Barclays maintained its "Overweight" rating on the stock as well as its Target Price of $28.00.

Write to Chip Brian at cbrian@tradethetrend.com

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Related terms: eps, europe, market, nasdaq, sales, securities