There were plenty of rumors that Cisco (Nasdaq:CSCO) was going to launch a major restructuring effort, and the company delivered exactly that on Monday. While the plan may very well reduce costs and boost margins, investors should not get too excited about the announcement - companies do not cost-cut their way to prosperity, and sending thousands of employees packing does not address the company's significant competitive deficiencies.
Poor Performance Comes Home to Roost
Cisco has been stuck in a funk for a while now as tech investors have abandoned this one-time golden child. Acquisitions of companies like Scientific Atlanta have failed to produce much value and the company has seen its competitive edge lost to dynamic rivals like F5 (Nasdaq:FFIV), Juniper (Nasdaq:JNPR), Hewlett-Packard (NYSE:HPQ) and Riverbed (Nasdaq:RVBD).
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