High Earnings Expectations For Pepsi, Not So Much For Cisco

The earnings season may be winding down, but it's not over yet. Perhaps two of the most anticipated quarterly reports this week will be those from Cisco Systems, Inc. CSCO and PepsiCo, Inc. PEP.

The Wall Street consensus forecasts call for earnings that are smaller than a year ago from the networking products and services giant, which during the most recent quarter bought AppDynamics before its IPO.

On the other hand, solid bottom-line growth is expected from the beverage and snack foods giant, relative to the year ago period. During its most recent quarter, there were calls for a global sugar tax.

Cisco

When Cisco shares its fiscal second-quarter results after the closing bell on Wednesday, analysts on average predict that its earnings per share (EPS) will have dropped by a penny from a year ago to $0.56. The $11.55 billion in expected revenue would be more than 3 percent lower. This company has exceeded consensus EPS estimates by a two or three cents in the past six quarters.

The forecast from 136 Estimize respondents is a little more optimistic, with EPS expected to come in at $0.58. That would be above the guidance provided by Cisco. The consensus revenue estimate for the three months that ended in January is $11.62 billion, which would be the lowest quarterly top line in two years.

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Pepsi

Wall Street's consensus forecast for PepsiCo calls for EPS to have risen from $1.06 in the same period of last year to $1.16. Note that the company has topped analysts' EPS expectations by at least a nickel in the past three quarters. The 36 Estimize respondents have a consensus estimate of $1.17 per share for the three months that ended in December.

Estimize underestimated revenue in the previous quarter, and this time the respondents are looking for $19.58 billion, which would be the highest reading in the past six quarters. It compares with the Wall Street consensus forecast for the fourth quarter of $19.53 billion, or up around 5 percent year-over-year. Look for PepsiCo to share its latest results first thing Wednesday morning.

And Others

Also this week, Wall Street anticipates smaller earnings from DaVita, Deere, Devon Energy, Duke Energy, Groupon and T-Mobile. If the analysts are correct, CF Industries will report a net loss.

However, at least some growth on the bottom line is expected at AIG, Analog Devices, Applied Materials, Barrick Gold, Campbell Soup, CBS, Charter Communications, Express Scripts, Marriott, MGM Resorts, Teva Pharmaceutical, Waste Management and Williams Companies.

The following week, the focus turns to the big retailers, and quarterly reports due out include those from Gap, Home Depot, J.C. Penney, Kohl's, Macy's, Nordstrom and Wal-Mart.

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