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Cisco Systems, Inc. (NASDAQ:CSCO): Alcatel Lucent (ALU) Comeback Is A Threat

Boston, MA 11/27/2013 (wallstreetpr) – Cisco Systems, Inc. (NASDAQ:CSCO) recently disappointed investors with narrow forecast of its future and since then the company has done little to tell investors that things are not as bad as it may have sounded during the earnings call. In the absence of such soothing explanation, shares of the most popular networking solutions company are on their way down. Each day the stock seems to be making a downward progress, although in varying degrees. It is safe to say that 2013 has been a poor episode for this networking company, but gain, 2014 doesn’t look either if the company’s guidance is anything to go by.

The company did attempt to explain why its near future looks bleak. The explanation touched on the impact of the partial shutdown of the U.S. government for several weeks and poor performance of its international business. In particular, the issue in China denied the company the much needed sales opportunity in this strategic emerging market.

A bit of the problems in China are connected to the growing concern of the U.S. spying on foreign leaders and citizens and this is giving U.S. firms, especially networking companies like Cisco Systems, Inc. (NASDAQ:CSCO) to explain their innocence in the spying plot by their government. Outside of politics, Chinese firms are also actively dismantling the business networks of U.S. companies by offering almost similar technology at nearly half the cost. Now this is not interesting and it might take some time before CSCO regains ground in this key market.

However, it is not difficult to see that Cisco Systems, Inc. (NASDAQ:CSCO), perhaps by design or default, has allowed too much room for its rivals to rise against it in the market. This is why Alcatel Lucent SA (ADR) (NYSE:ALU) seems to be gaining footing against CSCO in China and Europe. If this be the case, there is reason to be worried about the future of Cisco Systems, Inc. (NASDAQ:CSCO) if CEO John Chambers and his team doesn’t find a way to deal with growing problem in terms of competition from underdogs and struggling companies like ALU that are betting their comeback on their company’s misfortunes.

Published by Pushpa Naresh

Pushpa Naresh has done MBA (Finance) and an avid market tracker. She is a technical analyst who closely tracks US markets along with other global markets like India. She has been expressing her views about markets and also advises various clients.



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