Will Cisco Q2 Earnings reflect soft growth in-line with guidance amid rising margins
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Cisco (NASDAQ:CSCO) is scheduled to announce Q2 earnings results on Wednesday, February 16th, after market close.
The consensus EPS Estimate is $0.81 (+2.5% Y/Y) and the consensus Revenue Estimate is $12.66B (+5.5% Y/Y).
Over the last 2 years, CSCO has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.

Over the last 3 months, EPS estimates have seen 6 upward revisions and 14 downward. Revenue estimates have seen 4 upward revisions and 15 downward.
Q2 performance is to be driven by significant gains from solid Catalyst 9000 adoption, Webex and growing clout of security solutions.
Q2 revenue is seen growing between 4.5% to 6.5% Y/Y; non-GAAP EPS is seen between $0.80 to $0.82. Analysts consensus estimates for revenue growth seen at 5.8% while EPS is seen at $0.81.
Zacks cites: Increasing investments on portfolio expansion, product enhancements and acquisitions amid stiff competition in the networking infrastructure market are expected to have dragged down margin expansion in Q2; the company expects to report non-GAAP gross margin in the range of 63.5-64.5% and non-GAAP operating margin rate between 32.5% - 33.5%.
Last week, it was known that Cisco made a takeover offer for Splunk worth $20B+; analysts reaction on the same was as follows:


Jefferies believes Cisco potentially buying Splunk would have strategic value and significant synergies.
Credit Suisse sees Splunk is a unique asset for reasons that are consistent with some iconic companies in the software industry.
Despite having a mixed bag of acquisitions over the years, Morgan Stanley believes that Splunk acquisition would be strategically positive.


YTD, the stock lost 16% while in past 1-month trading the stock eroded 13%; Wall Street Analysts and SA Author rating stands at Buy for the stock.
SA Columnist Hale Stewart believes Cisco Systems is a Buy.