Cisco Systems, Inc
.
CSCO
is set to report second-quarter fiscal 2021 results on Feb 9.
The company is likely to have benefited from ongoing momentum in Webex services on growing clout of video conferencing.
Moreover, solid uptick in network security solutions, triggered by coronavirus crisis induced Internet traffic growth led by work-from-home and stay-at-home wave, is likely to have acted as a tailwind.
However, decline in IT spending and coronavirus pandemic-induced broader macroeconomic weakness across small and medium sized businesses may have affected the to-be-reported quarter’s performance.
Click
here
to know how Cisco’s overall fiscal second-quarter performance is expected to be.
Momentum in Security Offerings: Key Contributor to Growth
Growing clout of web security, unified threat, network security and advanced threat solutions in the first quarter of fiscal 2021 is likely to have continued in the quarter to be reported, primarily driven by growth in Internet traffic, and rising spend on cybersecurity as employees work remotely amid social distancing norms.
Further, Cisco’s focus on portfolio innovation across cloud security solutions and differentiated end-to-end approach that helps in securing identity, endpoints and the network might have expanded customer base in the fiscal second quarter, courtesy of rising security headwinds faced by enterprises globally.
Moreover, robust adoption of cloud-based solutions, including Duo and Umbrella, has been encouraging.
Cisco Systems, Inc. Revenue (Quarterly)
Cisco Systems, Inc. revenue-quarterly
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Cisco Systems, Inc. Quote
Also, growing clout of latest security solutions, including SecureX and Secure Remote Worker, holds promise.
The Zacks Consensus Estimate for Security is pegged at $833 million, indicating an improvement of 11.4% from the year-ago quarter.
Strength in Webex Solutions Bodes Well
Cisco’s Applications segment’s fiscal second-quarter performance is expected to have benefited from strong uptick in enterprise collaboration offerings including Webex Meetings, Webex Devices and Webex Teams.
Coronavirus crisis induced work-from-home wave has triggered demand for teleconferencing, workspace collaboration and telehealth services. This, in turn, is likely to have bolstered the adoption of Cisco’s Webex solutions in the quarter to be reported.
Notably, Cisco, currently carrying a Zacks Rank #3 (Hold), updates its Webex portfolio to aid users enhance productivity with advancements in video conferencing. This integration of AI and ML capabilities aimed at improving engagement is expected to have further increased adoption of Webex services in the quarter to be reported. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Consequently, this is expected to have aided the company strengthen competitive position in the enterprise communication market against
Microsoft
’s
MSFT
Teams,
Zoom Video Communications
ZM
and Slack.
Further, incremental adoption of business resiliency solutions to aid enterprises boost workforce and workplace productivity is likely to have favored segmental performance.
Strength in the company’s latest solutions focused on distance learning and telehealth services, in a bid to capitalize on growing clout of web-based learning and telehealthcare trends, might have driven the fiscal second-quarter performance.
The Zacks Consensus Estimate for Applications revenues stands at $1.389 billion, suggesting growth of 3% from the year-ago reported figure.
Solid Catalyst 9000K Adoption to Favor Prospects
Growing clout of Cisco’s campus switches, including Cat9K and Nexus 9K, are likely to have benefited Infrastructure Platforms segment’s performance in the fiscal second quarter.
However, increasing investments on product enhancements amid stiff competition from
Juniper
JNPR
and Arista in networking infrastructure market may have limited margin expansion.
The Zacks Consensus Estimate for Infrastructure Platforms revenues stands at $6.242 billion, suggesting a decline of 4.4% from the year-ago reported figure.
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