Cisco Duck

Cisco Systems reported net income of $1.9 billion or $0.33 cents per share for the fourth quarter. Net income came in 73.7% higher than the same quarter last year, and sales were 27% higher. Yet the stock got hammered today as these results missed analyst expectations and gave a hint of a slowdown for business at the networking giant. “Cisco has a good business model, but it’s not good enough in this environment,” said Andy “Raw” Kibbens, star analyst and co-CEO of The Markets Are Open. “There is more competition from the small networking companies, and believe me, they have an excess of growth.” The stock was down a whopping 10% as the earnings results disappointed and as analysts came in to turn the rubble into sawdust.

Analysts at BMO downgraded the stock from Outperform to Market Perform, lowering their price target to $23. An analyst at Oppenheimer cut the rating down by the same amount as BMO. Morgan Stanley gave Cisco an Equal-weight rating. “The downgrades are certainly inline,” Kibbens commented, “I’m not exactly sure was an Equal-weight rating is… I see at as a Hold of some sort. I say cut your Cisco position down to $0 and move into something better.” The company reported a mixed quarter and a weak future outlook for its business. “What do you expect?” Kibben remarked, “$0.33 cents per share is pocket change. Intel reports a beautiful $0.51 cents per share, trades lower than Cisco, and is expecting an even larger surplus of juicy profits next quarter. If you have any intelligence, switch to Intel,” he told reporters. Intel trades at approximately half the PE ratio of Cisco.