Is it a Good Time to Buy Cisco Gear?

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If you're making an IT or telecom purchase from a large vendor, it's always wise to scope out financial performance. This vendor intelligence can often have a positive influence on sourcing strategy, or provide leverage at the negotiation table.

Take Cisco, for example. For the quarter ending October 31st, the vendor posted revenues of $12.09B. This is well short of the composite analyst estimate of $12.34B. They also reported earnings of $0.53 per share, not including exceptional items.

With that in mind, is now the best time to proceed with that network upgrade or expansion? Maybe not.

What caught our eye at NPI is Cisco's forecast of a very steep 8-10% decline in revenue with a sagging $0.45-$0.47 in earnings per share. The company cited a number of reasons for the decline, including the effects of the government shutdown and corresponding economic uncertainty, and even that revenues from emerging markets are suffering due to the fallout of the NSA spying revelations. Whatever the reasons, you can expect that your Cisco rep is incented to extract as much revenue in the coming quarter as possible.

Those enterprises considering an end-of-year Cisco purchase might consider moving those buys into January. By waiting until the end of their 3rd quarter (January), customers may gain access to more incentives (including savings) and added leverage.