Cisco Systems on Wednesday said it would exceed Wall Street average estimates for second-quarter earnings per share and revenues--a surprise disclosure made hours before the company is due to report quarterly results.
San Jose, Calif.-based Cisco says it inadvertently told a "large" number of employees that the company exceeded its goal for booked product orders in the quarter ended Jan. 26.
In pre-market trading, Cisco shares rose, to $19.25 from Tuesday's close of $18.50.
Cisco says the memo stated booked orders for products were $3.9 billion in the quarter, above an internal goal of $3.75 billion. The memo, however, did not give specific information about revenue or earnings for the quarter, the company says.
Cisco is scheduled to report second-quarter results after the market closes Wednesday.
Analysts on average expected Cisco to report a profit of 5 cents a share and revenue of $4.55 billion for the quarter, according to a survey by research firm Thomson Financial/First Call.
"We felt that it was necessary to disclose this information publicly, given the broad internal distribution of the communication," said Cisco CFO Larry Carter in a statement.
Nikos Theodosopoulos, an analyst with UBS Warburg, says he has no reason to believe the disclosure to employees was anything but inadvertent.
Theodosopoulos also says he believes a decline in Cisco's business for serving large companies other than telecommunications firms has stopped, with operations in the United States and Europe showing some quarter-over-quarter improvements.
"The press release basically confirms what we thought," he says.
New securities regulations have put pressure on companies to disclose statements on financial results and expectations to the public, and to inform investors promptly if private disclosures are inadvertently made.
With additional reporting by Daniel Sorid
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