Last Wednesday Cisco announced its fourth fiscal quarter financial reports. Cisco reported a 79% jump in profit however its stock price fell down by 8% in after hours trading as sales were slightly below analysts’ expectations. The question is Why this strong negative reaction?
Lets take a closer look; the world is being very cautious recently about financial and economic indicators, no one really knows what is going to happen as economic and financial indicators are so confusing and showing mixed signals. Some indicators warn of the possibility of a double dip recession while others indicate that things is still going fine but may be we are just slowing down. There is no clear direction and most of the markets are pausing or moving sideways for the last few months.
Although Cisco’s profit was up by 79% which is great, sales were slightly lower than expectations and the market has been recently very reactive and sensitive to bad or unexpected news than it is for good news.
Have a look at this article for the full story Cisco Profit shares fell on revenue mess.
The article is mentioning some numbers and I can see most of the numbers are improving except the days sales outstanding that rose from 39 to 41 days which is also in the safe side.
Some indicators about the US economy will be announced this week and will be deeply analyzed by economists for signs whether the economy is going to a double dip or just slowing down. Lets hope for the best and if you are investing keep your eyes open and keep some cash aside.
P.S. This site is still about networking topics but I thought some of you might be interested in economics or finance like me and the post is still about Cisco the tech giant so we have not gone so far 🙂