Tom Reese/Paul Rubillo, Dividend.com
Technology giant Cisco Systems (CSCO) reported its quarterly earnings Wednesday, and the results were hampered by a significant decline in January orders.
The company said that orders for its networking products declined by 20% in January, compared to the same month last year. Cisco derives nearly 80% of its income from product sales.
Excluding one-time items, Cisco earnings came in at 32 cents per share, which was two cents ahead of analyst estimates. However, the company's sales of $9.1 billion were down 7.5% from the same period a year ago.
CEO John Chambers said that he expects a revenue drop of 15-20% during the current quarter, as the company continues its cost-cutting plan through 2009. If sales continue to decline, Chambers hinted that the company's plan could include laying off up to 10% of its workforce.
The Bottom Line
The stock has technical support around the $13 level. If that fails to hold, we could see the $9 price point come into play. If the shares can firm up, we see overhead resistance around the $19-21 price levels. We do not currently rate this non-dividend paying stock at this time, but we do monitor the company closely as it is a key technology name.
Cisco Systems does not currently pay a dividend.
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