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Cisco Systems (NAS:CSCO) Owner Earnings per Share (TTM)

: 3.22 (As of Jan. 2023)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Cisco Systems's Owner Earnings per Share (TTM) ended in Jan. 2023 was $3.22. It's Price-to-Owner-Earnings ratio for today is 15.82.


The historical rank and industry rank for Cisco Systems's Owner Earnings per Share (TTM) or its related term are showing as below:

CSCO' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 9.64   Med: 14.49   Max: 21.05
Current: 15.8


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Cisco Systems was 21.05. The lowest was 9.64. And the median was 14.49.


CSCO's Price-to-Owner-Earnings is ranked better than
59.46% of 994 companies
in the Hardware industry
Industry Median: 20.73 vs CSCO: 15.80

Cisco Systems's Earnings per Share (Diluted) for the three months ended in Jan. 2023 was $0.67. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jan. 2023 was $2.73. It's PE Ratio ratio for today is 18.66.

Cisco Systems's EPS without NRI for the three months ended in Jan. 2023 was $0.67. Its EPS without NRI for the trailing twelve months (TTM) ended in Jan. 2023 was $2.73. It's PE Ratio without NRI ratio for today is 18.66.


Cisco Systems Owner Earnings per Share (TTM) Historical Data

The historical data trend for Cisco Systems's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cisco Systems Annual Data
Trend Jul13 Jul14 Jul15 Jul16 Jul17 Jul18 Jul19 Jul20 Jul21 Jul22
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.38 3.10 3.07 3.13 2.66

Cisco Systems Quarterly Data
Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.93 2.90 2.66 2.72 3.22

Competitive Comparison

For the Communication Equipment subindustry, Cisco Systems's Owner Earnings per Share (TTM), along with its competitors' market caps and Owner Earnings per Share (TTM) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Cisco Systems Owner Earnings per Share (TTM) Distribution

For the Hardware industry and Technology sector, Cisco Systems's Owner Earnings per Share (TTM) distribution charts can be found below:

* The bar in red indicates where Cisco Systems's Owner Earnings per Share (TTM) falls in comparison to its industry or sector. The grey bar indicates the Owner Earnings per Share (TTM)'s extreme value range as defined by GuruFocus.



Cisco Systems Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Cisco Systems's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 11,302
Depreciation, Depletion and Amortization 1,761
Change In Deferred Tax -1,016
5Y Average of Maintenance Capital Expenditure 684
Change In Working Capital 1,907
Shares Outstanding (Diluted Average) 4,116

1. Start with "Net Income" from income statement. Cisco Systems's Net Income for the trailing twelve months (TTM) ended in Jan. 2023 was $11,302 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Cisco Systems's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jan. 2023 was $1,761 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Cisco Systems's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jan. 2023 was $-1,016 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $684 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Cisco Systems's 5-Year Average Maintenance Capital Expenditure = $684 Mil

5. "Change In Working Capital" is from cashflow statement. Cisco Systems's Change In Working Capital for the trailing twelve months (TTM) ended in Jan. 2023 was $1,907 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Cisco Systems's Shares Outstanding (Diluted Average) for the months ended in Jan. 2023 was 4116.000 Mil.

Cisco Systems's Onwer Earnings Per Share for Jan. 2023 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 11302 +1761+-1016
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-684.27686247219+1907)/4116.000
=3.22

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=50.94/3.22
=15.82

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Cisco Systems Owner Earnings per Share (TTM) Related Terms

Thank you for viewing the detailed overview of Cisco Systems's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.


Cisco Systems (NAS:CSCO) Business Description

Cisco Systems logo
Industry
Address
170 West Tasman Drive, San Jose, CA, USA, 95134-1706
Cisco Systems is the largest provider of networking equipment in the world and one of the largest software companies in the world. Its largest businesses are selling networking hardware and software (where it has leading market shares) and cybersecurity software like firewalls. It also has collaboration products, like its Webex suite, and observability tools. It primarily outsources its manufacturing to third parties and has a large sales and marketing staff—25,000 strong across 90 countries. Overall, Cisco employees 80,000 employees and sells its products globally.
Executives
Sarah Rae Murphy director C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Jeffery S. Sharritts officer: EVP & Chief Cust & Prtnr Offcr 1200 ABERNATHY RD., NE, STE 1200, ATLANTA GA 30328
Deborah L Stahlkopf officer: EVP and Chief Legal Officer C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Marianna Tessel director C/O INTUIT INC., 2700 COAST AVENUE, MOUNTAIN VIEW CA 94043
John D Harris director C/O FLEXTRONICS INTERNATIONAL USA, INC., 6201 AMERICA CENTER DRIVE, SAN JOSE CA 95002
Richard Scott Herren officer: EVP and CFO 851 WEST CYPRESS CREEK ROAD, FORT LAUDERDALE FL 33309
Wesley G Bush director 333 MAPLE AVENUE EAST, #3080, VIENNA VA 22180
Lisa T Su director C/O ADVANCED MICRO DEVICES, INC., 2485 AUGUSTINE DRIVE, SANTA CLARA CA 95054
Carol B Tome director 55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Geraldine Elliott officer: EVP, Chief Sales & Mktg Offcr 1194 N. MATHILDA AVE., SUNNYVALE CA 94089
Maria Martinez officer: EVP, Chief Customer Exp Offcr THE LANDMARK @ 1 MARKET STREET, SUITE 300, SAN FRANCISCO CA 94105
Mark Garrett director 106 EAST BABCOCK STREET SUITE 3A, BOZEMAN MT 59715
Irving Tan officer: SVP, Operations and Digital 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
David Goeckeler officer: EVP, Networking and Security C/O WESTERN DIGITAL CORPORATION, 5601 GREAT OAKS PARKWAY, SAN JOSE CA 95119
Brent L Saunders director 2000 GALLOPING HILL ROAD, C/O SCHERING PLOUGH CORP, KENILWORTH NJ 07033

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