Tomahawk, WI 02/10/2014 (BasicsMedia) – Cisco Systems Inc. (NASDAQ:CSCO) which is involved in the business of designing manufacturing and selling of internet protocol-based networking and other products is set to release its Q2 earnings before the bell rings on February 12, 2014. The company with a market capitalization of $119.76 billion is also expected to hold a conference call the same day at 4:30 PM EST. Despite Wall Street fearing the worst, the company is not expected to post below par results but awaiting to see if they will beat consensus estimates.

Cisco might beat estimates

Cisco Systems Inc. (NASDAQ:CSCO) had posted low estimates for the second quarter mainly due to, slow pick up in its emerging markets which had initially been thought to be growing. Despite all this, the company has seen an upsurge in spending in the US markets with Western Europe markets showing signs of massive improvements.

CSCO expected earnings according to BMO research

According to a research by BMO, Cisco Systems Inc. (NASDAQ:CSCO) is expected to post revenues totaling $11.1 billion for the second quarter translating to $0.45 earnings per share. Wall Street had initially placed its consensus estimates at earnings per share of $0.46 and total revenue of $11 billion. CSCO’s gross margins are expected to come in at 62.5% with operating margins in the levels of 27.3%.

The major downside will notably be in its routers business according to BMO which will experience a drop of 14% to total revenues of $1.7 billion. Cisco Systems Inc. (NASDAQ:CSCO) sales business is also expected to post a plunge in its earnings which looks set to decline by 8% to hit low levels of $3.4 billion. The services business is also expected to experience the harsh market conditions by plunging to lows of $2.6 billion in total revenue representing drop of 3%.

CSCO Dividend hike

BMO expects Cisco Systems Inc. (NASDAQ:CSCO) to raise its dividend from lows of 17 cents to highs of 20 cents with its expected Q2 results, based on the current market price, this will represent an improved yield of 3.7%. The current market conditions seems to have had a negative effect on the company with its management expecting slow growth margins of 3-6% for the next five years . This is slight drop compared to earlier estimates of 5-7%. This is in line with its past growth rate which stood at 2%.

Cisco Systems Inc. (NASDAQ:CSCO) stock seem to be trading on safe margins in the market having closed Friday trading sessions un moved at $22.67 a slight improvement of 0.80%.

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