Cisco shares fall; analysts fret over long-term growth

Cisco Systems Inc's (CSCO.O) warning that it will fare worse in the current quarter than what Wall Street had feared, and its plans to cut jobs globally prompted at least two brokerages to take a negative view on the networking giant's stock.

Cisco shares were down 3 percent at $17.16 in pre-market trade. They closed at $17.78 on Wednesday on Nasdaq.

Robert W. Baird downgraded Cisco shares to "neutral" from "outperform" and said margins in the company's traditional high-end switching business remain well below corporate average.

Cisco's switching business has seen sales fall 9 percent in the third quarter after sliding 7 percent in the second quarter.

Switching gross margin issues are not likely to be corrected in the near to medium term, the brokerage said in a note dated May 11.

Read Full Article from Reuters

- Posted: 2011-05-12 13:01:03

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