Cisco (CSCO, Financial) is tentatively scheduled to release its 3rd quarter earnings report on May 14, 2014, after the market closes. Since the telecom equipment manufacturer beat the 2nd quarter earnings predictions, analysts are looking for a repeat performance for the third quarter ending April 30, 2014.
Third Quarter Growth
Shortly after the second quarter 2014 earnings release, the company provided guidance that it expected to see a 6% to 8% decrease in third quarter revenue. Cisco is under pressure from domestic and foreign competitors like Hewlett-Packard (HPQ, Financial), Juniper Networks (JNPR, Financial) and Huawei, and faces declining sales in developing nations and in Europe. To counter these setbacks, Cisco continues implementing new cost-cutting measures and concentrating on divisions like network security that generates recurring revenues. As a result, analysts now expect third quarter revenue and earnings to increase over the amounts reported in the second quarter.
| Â | Q3 Estimates | Q2 Actual | Q1 Actual |
| Revenue | 11.2B - 11.5B | 11.2B | 12.1B |
| EPS | $0.47 - $0.49 | $0.47 | $0.37 |
Stock Price Support and Resistance
Pivot points, along with support and resistance levels, can indicate an optional place to enter or close a trade. With Cisco stock currently trading in the $22 to $23 range and using $23.14 as the pivot point, look for support and resistance at these levels:
| Â | Support | Â | Resistance |
| S1 | 23.08 | R1 | 23.23 |
| S2 | 22.99 | R2 | 23.29 |
| S3 | 22.93 | R3 | 23.38 |
Analysts peg Cisco’s target future stock price at $26.00 a share.
Disclosure: I do not have a position in any of the stocks mentioned in this article and have no plans to open a position in the next 72 hours.
