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Cisco Beats on Earnings, Cuts Outlook: ETFs in Focus
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Tech prime Cisco Systems (CSCO - Free Report) beat first-quarter fiscal 2024 estimates on both counts but cut its revenue and earnings outlook for the fiscal year, which pulled down the stock price.
CSCO shares tumbled as much as 16% before recovering somewhat to an 11% decline in after-market hours. In pre-market trading, the stock is down 11.5% at the time of writing. The weak trading might be reflected in the ETFs with the largest allocation to this networking giant. Therefore, investors should keep a close eye on them in the coming weeks. The ETFs include iShares U.S. Telecommunications ETF (IYZ - Free Report) , iShares North American Tech-Multimedia Networking ETF , Qraft AI-Enhanced U.S. Next Value ETF , Pacer Data and Digital Revolution ETF (TRFK - Free Report) and First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report) .
Cisco Earnings in Detail
Earnings of $1.11 per share outpaced the Zacks Consensus Estimate of $1.03 and improved 29% from the year-ago earnings. Revenues grew 8% year over year to $14.7 billion and edged past the consensus mark of $14.6 billion.
Cisco had a solid start to fiscal 2024 with the strongest Q1 results in its history in terms of revenues and profitability. However, a slowdown in new product orders for networking hardware is taking a toll on the company’s growth prospects. The company believes that customers are currently focused on installing and implementing products in their environments following exceptionally strong product delivery over the past three quarters (read: ETFs in Focus as Cisco Acquires Splunk in $28 Billion AI-Deal).
As such, the networking giant lowered fiscal 2024 revenue guidance from $57-$58.2 billion to $53.8-$55.00 billion and earnings per share guidance from $4.01-$4.08 to $3.87-$3.93. For fiscal second-quarter 2024, Cisco expects revenues in the range of $12.6-$12.8 billion and earnings of 82-84 cents per share.
The company nevertheless expects to see demand return in the second half of the year.
iShares U.S. Telecommunications ETF offers exposure to U.S. companies that provide telephone and Internet products, services and technologies. It follows the Russell 1000 Telecommunications RIC 22.5/45 Capped Index, holding 20 stocks in its basket. Cisco takes the top position at 17.9% of the assets.
iShares U.S. Telecommunications ETF has AUM of $245.3 million and trades in an average daily volume of 326,000 shares. IYZ charges 40 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Assessing Telecomm ETFs Amid Q3 Earnings).
iShares North American Tech-Multimedia Networking ETF
iShares North American Tech-Multimedia Networking ETF provides exposure to telecom equipment, data networking and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. iShares North American Tech-Multimedia Networking ETF has 22 securities in its basket, with Cisco taking the fifth spot, holding an 8.7% allocation.
iShares North American Tech-Multimedia Networking ETF has accumulated $45.5 million in its asset base and sees a good volume of around 3,000 shares a day. IGN charges 41 bps in annual fees and carries a Zacks ETF Rank #3 with a High risk outlook (see: all the Technology ETFs here).
Qraft AI-Enhanced U.S. Next Value ETF
Qraft AI-Enhanced U.S. Next Value ETF is an actively managed ETF that seeks capital appreciation by utilizing a value investing strategy enhanced by the use of artificial intelligence. It holds 100 stocks in its basket, with FedEx occupying the second position at 7%.
Qraft AI-Enhanced U.S. Next Value ETF has accumulated $4.6 million in its asset base and charges 75 bps in annual fees. It trades in an average daily volume of 100 shares.
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 80 stocks in its basket. Out of these, Cisco is the third firm, accounting for a 5.6% share.
Pacer Data and Digital Revolution ETF has accumulated $5.2 million in its asset base. It has an expense ratio of 0.60% and trades in a meager volume of about 1000 shares per day on average. TRFK has a Zacks ETF Rank #2 (Buy).
First Trust Nasdaq Cybersecurity ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. The index includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers and mobile devices to provide protection for the integrity of data and network operations. First Trust Nasdaq Cybersecurity ETF holds 33 stocks in its basket, with Cisco taking the fourth spot at 5.5% (read: Here's Why Cybersecurity ETFs Are At a 52-Week High).
First Trust Nasdaq Cybersecurity ETF has accumulated $5 billion in its asset base. CIBR charges 60 bps in annual fees and trades in an average daily volume of about 359,000 shares.
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Cisco Beats on Earnings, Cuts Outlook: ETFs in Focus
Tech prime Cisco Systems (CSCO - Free Report) beat first-quarter fiscal 2024 estimates on both counts but cut its revenue and earnings outlook for the fiscal year, which pulled down the stock price.
CSCO shares tumbled as much as 16% before recovering somewhat to an 11% decline in after-market hours. In pre-market trading, the stock is down 11.5% at the time of writing. The weak trading might be reflected in the ETFs with the largest allocation to this networking giant. Therefore, investors should keep a close eye on them in the coming weeks. The ETFs include iShares U.S. Telecommunications ETF (IYZ - Free Report) , iShares North American Tech-Multimedia Networking ETF , Qraft AI-Enhanced U.S. Next Value ETF , Pacer Data and Digital Revolution ETF (TRFK - Free Report) and First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report) .
Cisco Earnings in Detail
Earnings of $1.11 per share outpaced the Zacks Consensus Estimate of $1.03 and improved 29% from the year-ago earnings. Revenues grew 8% year over year to $14.7 billion and edged past the consensus mark of $14.6 billion.
Cisco had a solid start to fiscal 2024 with the strongest Q1 results in its history in terms of revenues and profitability. However, a slowdown in new product orders for networking hardware is taking a toll on the company’s growth prospects. The company believes that customers are currently focused on installing and implementing products in their environments following exceptionally strong product delivery over the past three quarters (read: ETFs in Focus as Cisco Acquires Splunk in $28 Billion AI-Deal).
As such, the networking giant lowered fiscal 2024 revenue guidance from $57-$58.2 billion to $53.8-$55.00 billion and earnings per share guidance from $4.01-$4.08 to $3.87-$3.93. For fiscal second-quarter 2024, Cisco expects revenues in the range of $12.6-$12.8 billion and earnings of 82-84 cents per share.
The company nevertheless expects to see demand return in the second half of the year.
ETFs in Detail
iShares U.S. Telecommunications ETF (IYZ - Free Report)
iShares U.S. Telecommunications ETF offers exposure to U.S. companies that provide telephone and Internet products, services and technologies. It follows the Russell 1000 Telecommunications RIC 22.5/45 Capped Index, holding 20 stocks in its basket. Cisco takes the top position at 17.9% of the assets.
iShares U.S. Telecommunications ETF has AUM of $245.3 million and trades in an average daily volume of 326,000 shares. IYZ charges 40 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Assessing Telecomm ETFs Amid Q3 Earnings).
iShares North American Tech-Multimedia Networking ETF
iShares North American Tech-Multimedia Networking ETF provides exposure to telecom equipment, data networking and wireless equipment companies by tracking the S&P North American Technology-Multimedia Networking Index. iShares North American Tech-Multimedia Networking ETF has 22 securities in its basket, with Cisco taking the fifth spot, holding an 8.7% allocation.
iShares North American Tech-Multimedia Networking ETF has accumulated $45.5 million in its asset base and sees a good volume of around 3,000 shares a day. IGN charges 41 bps in annual fees and carries a Zacks ETF Rank #3 with a High risk outlook (see: all the Technology ETFs here).
Qraft AI-Enhanced U.S. Next Value ETF
Qraft AI-Enhanced U.S. Next Value ETF is an actively managed ETF that seeks capital appreciation by utilizing a value investing strategy enhanced by the use of artificial intelligence. It holds 100 stocks in its basket, with FedEx occupying the second position at 7%.
Qraft AI-Enhanced U.S. Next Value ETF has accumulated $4.6 million in its asset base and charges 75 bps in annual fees. It trades in an average daily volume of 100 shares.
Pacer Data and Digital Revolution ETF (TRFK - Free Report)
Pacer Data and Digital Revolution ETF aims to offer investors exposure to the globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 80 stocks in its basket. Out of these, Cisco is the third firm, accounting for a 5.6% share.
Pacer Data and Digital Revolution ETF has accumulated $5.2 million in its asset base. It has an expense ratio of 0.60% and trades in a meager volume of about 1000 shares per day on average. TRFK has a Zacks ETF Rank #2 (Buy).
First Trust Nasdaq Cybersecurity ETF (CIBR - Free Report)
First Trust Nasdaq Cybersecurity ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. The index includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers and mobile devices to provide protection for the integrity of data and network operations. First Trust Nasdaq Cybersecurity ETF holds 33 stocks in its basket, with Cisco taking the fourth spot at 5.5% (read: Here's Why Cybersecurity ETFs Are At a 52-Week High).
First Trust Nasdaq Cybersecurity ETF has accumulated $5 billion in its asset base. CIBR charges 60 bps in annual fees and trades in an average daily volume of about 359,000 shares.