Cisco earnings: Will big bets on software pay off?

When Cisco Systems Inc. reports earnings Wednesday, the big question will be if the networking giant’s repeated gambles on software can reverse a yearlong sales slide, or at least point to a reversal of that trend in the future.

Cisco CSCO, +1.06%  is scheduled to report fiscal second-quarter earnings less than a month after announcing its latest multibillion-dollar software acquisition, which valued AppDynamics Inc. at roughly double what it was to receive in an imminent initial public offering. While that deal isn’t scheduled to close until sometime this quarter, it is a continuation of Cisco’s focus on building a software business through acquisitions, with a focus on network visualization, security and the Internet of Things.

At the 2017 World Economic Forum in Davos, John Chambers, Executive Chairman and former CEO of Cisco Systems, Inc. discusses the present feeling of uncertainty, and why everyone should give the new Trump administration time. Photo: AP

Cisco needs those bets to pay off to repair sagging sales in its core business. The world’s largest seller of networking gear has suffered year-over-year revenue declines four quarters in a row, and analysts expect that trend to continue with Wednesday’s report. Analysts’ projections suggest it will be at least a year before Cisco finds rising revenue, so executives could spark a surge by promising that change will happen sooner…

Read Full Source: Marketwatch

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