Earnings Preview: Cisco Systems, Inc. (CSCO)

Cisco Systems, Inc. CSCO is currently lower on the session by 0.98%, trading at $24.11. The company is scheduled to report earnings today, after the closing bell. • Estimates The Street is looking for Q1 earnings per share of $0.40 on revenue of $10.74 billion. These estimates have fallen by $0.02 (-4.76%) over the past 90 days. The Whisper number for CSCO is $0.42. • Guidance The Street is looking for Q2 EPS of $0.42 on revenue of $11.08 billion. The full year 2011 estimates are $1.73 per share on revenue of $45.28 billion; FY 2011 is at $1.99 per share on revenues of $50.56 billion. • Technical Picture While CSCO is largely unchanged for the year, shares have been moving in large swings over that time period, hitting a high near $28.00 and a low near $20.00 all within the span of a few months. As of late, shares have been rallying and have recently regained the 50-day and 200-day moving averages. $24.87 is the next resistance level. • Volatility Both historical volatility and implied volatility have been falling for the past few months, following a spike higher in May. Currently HI is at 21% and IV is at 26%. The front month $24.00 straddle is trading at 38.02%; the December $24.00 straddle is trading at 29.75%. Vol is skewed toward the calls in both months. Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry and provide services associated with these products and their use. The Company provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world.