Cisco results, another beat

Well, sometimes you just have to be patient. This time last year, Cisco announced a big restructuring plan, and if you remember right, everyone got their knickers in a knot over margins falling. The company, their management and the stock price all felt the heat, and times were tough over at Cisco. And friends were few, you know how the saying goes. The stock price slid, listen to this wild ride over the last 12 months, exactly a year ago the share price was 22.04 Dollars. Fast forward to August 10 2011, the price was as low as 13.73 Dollars. Whoa!! Last evening the price closed at 20.43, still down over 12 months, but a lot has been done over that time. Amazingly the stock price is up 46.5 percent over six months. But is down 7.35 percent over twelve months.

Let us have a quick look at these numbers, this is for the second quarter in their 2012 financial year, which ended 28 January 2012. Q2 sales clocked 11.5 billion Dollars, that is a gain of 11 percent over the same quarter last year. Net income of 2.2 billion GAAP. EPS up 48 percent to 40 cents GAAP, 47 cents non-GAAP (net income non GAAP of 2.6 billion Dollars). But perhaps the most encouraging news is that the modest dividend of 6 cents was increased to 8 cents per quarter. Cash and cash equivalents increased by 2.3 billion Dollars quarter on quarter. And you know what they say, cash does not lie!

Cash and cash equivalents is now an eye popping 46.7 billion Dollars. Market Cap is currently just shy of 110 billion Dollars. Amazing. Simple math, minus the cash from the market cap and you get to 63.3 billion. Annualise net income, you get to 8.8 billion. Divide the market cap ex the cash by the annualized GAAP net income and hey presto, you are paying at current levels around 7.2 years worth of earnings. Cheap? Sure. Especially when you figure that the future of the internet is brighter than ever before! I would say that the stock is still a buy at this juncture, we will continue to accumulate as and when we see fit.