Monday, July 17, 2006

Calls of Note Part 3

- RBC Capital notes their field checks indicate that Cisco (NASDAQ:CSCO) is tracking towards the high end of the guidance range of $7.8 to $7.95 billion for the current quarter ending in July. On the margin, router sales and North American enterprise trends may remain ahead of plan. RBC is conservatively estimating $7.88 billion and $0.28 vs. the consensus of $7.92 billion and $0.28.

After almost two years since its introduction, Cisco's CRS-1 may be helping Cisco regain lost router market share. Specifically, Cisco may be winning a higher percentage of new network deals against Juniper Networks. Firm's contacts highlight that Cisco's share at China Telecom in the recent '06 expansion project has grown to the highest level in recent years. North American enterprise trends (50%) continue to be driven by switch upgrades and VoIP implementations. Services (19%) driven by renewals appear strong this time around.

The back half of the year and 2007 will bring increasing revenue opportunities related to carrier triple play and IPTV, particularly now that Cisco has a comprehensive end-to-end product portfolio for video. Reits Outperform and $23 tgt.

Notablecalls: Hardly a surprise but will add to today's positive sentiment.

No comments: