Cisco Orders Weak In All Regions Outside The Americas; Does It Matter?

Shares of Cisco Systems, Inc. (NASDAQ: CSCO) hit a new 52-week high of $33.97 on Thursday after the company reported its fiscal second-quarter results, which did contain a few concerning metrics.

Michael Genovese of MKM Partners commented in a research report that Cisco's reported earnings per share of $0.57 were one penny better than expected, while revenue of $11.58 billion was $40 million better than expected. As a whole, total product orders were flat on a year-over-year basis, which does represent an improvement from the prior quarter's 2 percent decline.

Related Link: Cisco Systems Reaches Highest Level Since November 2007

On the other hand, Cisco's orders outside of the Americas were weak. Specifically, orders originating from Europe, Middle East and Africa (EMEA) decelerated to negative 4 percent on a year-over-year basis from a 1 percent growth in the prior quarter. Similarly, Asia-Pacific orders fell (due to weakness in China) to negative 5 percent on a year-over-year basis from a 4 percent growth.

In addition, orders from emerging market countries were negative 7 percent year-over-year and BRIC (Brazil, Russia, India, China) plus Mexico orders were 5 percent lower year-over-year.

Meanwhile, Cisco's orders originating from the Americas region improved to positive 4 percent year-over-year from negative 4 percent.

Given the mixed trends in the quarter, Genovese maintains a Neutral rating with a price target raised to $35 from a previous $31. At last check, shares were up 2.5 percent at $33.64.

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