Yahoo Finance Cisco Q3 Earnings Beat, Shares Fall: ETFs in Focus
Tech prime Cisco Systems CSCO cheered investors with robust third-quarter fiscal 2023 results. The networking giant beat on both earnings and revenues, and offered an encouraging revenue guidance for the current quarter.
However, orders declined 23%, sending shares down 3% in after hours yesterday and 3.5% in pre-market trade today at the time of writing. The rough trading is likely to continue in ETFs, with the largest allocation going to this networking giant. These include iShares U.S. Telecommunications ETF IYZ, iShares North American Tech-Multimedia Networking ETF IGN, Pacer Data and Digital Revolution ETF TRFK, First Trust Nasdaq Cybersecurity ETF CIBR and Invesco Dynamic Networking ETF PXQ.
Cisco Earnings in Detail
Earnings of $1.00 per share outpaced the Zacks Consensus Estimate of 97 cents and improved 15% from the year-ago earnings. Revenues grew 14% year over year to a record $14.6 billion and edged past the consensus mark of $14.39 billion. The robust performance was driven by double-digit growth in both software and subscription revenues (see: all the Technology ETFs here).
For the fiscal fourth quarter, Cisco expects revenues to grow 14-16% and earnings of $1.05-$1.07 cents per share. The networking giant expects fiscal 2023 to be its best growth year in at least a decade. It projects revenue growth of 10.0-10.5% and earnings per share guidance of $3.80-$3.82.
ETFs in Detail
iShares U.S. Telecommunications ETF (IYZ)
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 21 stocks in its basket. Cisco takes the top position at 18.1% of assets (read: How Will Telecom ETFs Navigate Mixed Results in Q1 Earning?).
iShares U.S. Telecommunications ETF has AUM of $267.1 million and trades in an average daily volume of 808,000 shares. IYZ charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares North American Tech-Multimedia Networking ETF (IGN)
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 third spot, holding an 8.9% allocation.
iShares North American Tech-Multimedia Networking ETF has accumulated $82.2 million in its asset base and sees a good volume of around 11,000 shares a day. IGN charges 40 bps in annual fees and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Pacer Data and Digital Revolution ETF (TRFK)
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 81 stocks in its basket. Out of these, Cisco is the third firm, accounting for a 7.5% share.
Pacer Data and Digital Revolution ETF debuted in the space in June last year and has accumulated $1.1 million in its asset base. It has an expense ratio of 0.60% and trades in a meager volume of under 1000 shares per day on average.
First Trust Nasdaq Cybersecurity ETF (CIBR)
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 35 stocks in its basket, with Cisco taking the fifth spot at 5.9%.
First Trust Nasdaq Cybersecurity ETF has accumulated $4.5 billion in its asset base. CIBR charges 60 bps in annual fees and trades in an average daily volume of about 396,000 shares (read: 5 Top-Ranked ETFs to Tap the Red-Hot Technology Sector).
Invesco Dynamic Networking ETF (PXQ)
Invesco Dynamic Networking ETF offers exposure to the companies that are principally engaged in the development, manufacture, sale or distribution of products, services or technologies that support the flow of electronic information, including voice, data, images and commercial transactions. It follows the Dynamic Networking Intellidex Index, holding 31 securities in its basket. Of these, Cisco is the eighth firm, accounting for a 4.8% share.
Invesco Dynamic Networking ETF is relatively unpopular and illiquid in the broad technology space, with AUM of $37 million and an average daily volume of about 4,000 shares. It charges 63 bps in annual fees and has a Zacks ETF Rank #2 with a High risk outlook.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
First Trust NASDAQ Cybersecurity ETF (CIBR): ETF Research Reports
iShares U.S. Telecommunications ETF (IYZ): ETF Research Reports
iShares North American Tech-Multimedia Networking ETF (IGN): ETF Research Reports
Invesco Dynamic Networking ETF (PXQ): ETF Research Reports
Pacer Data and Digital Revolution ETF (TRFK): ETF Research Reports
