While it is never pleasant for employees affected by the job cuts, Cisco (NASDAQ: CSCO) CEO Chuck Robbins recent decision to cut 5,500 jobs - equal to about 7% of its global workforce - it was a bad necessary . Experts and investors seem to have come on board with the decision, so they should because they will direct new resources to fast-growing markets.
IBM (NYSE: IBM) announced up to 14,000 jobs will be lost this year as he also continues his visit to the strategic imperatives CEO Ginni Rometty including cloud, security, cognitive analysis computer driven, and large volumes of data. The good news for investors, Cisco and IBM is that if they each received a 16% jump in share prices in 2016, the two still offer significant upward.
What is the best buy? It is not an easy question, and for all the right reasons: both offer a significant growth potential, as well as two highest dividend yields in the technology.
Now sold its video business SP CPE, Cisco has been able to grow year after year revenue by 2% to $ 12.6 billion. What makes the results Cisco is so impressive that he was able to achieve revenue bunting, even if it continues its abandonment switching routers legacy and enterprise.
The change consists of 30% of turnover Cisco last quarter, almost 32% since last year after adjusting for the video of the SP unit. The switches are not likely to drop as dramatically as routers in total sales by Robbins and the team to focus on the data center changes: a great opportunity as companies move data to the cloud.
As for routing, equivalent to 17% of sales in the quarter last year: This piece of cake Cisco's revenue has been reduced to 15%. And keep in mind Robbins has only been in charge since July last year, so now is making its impact felt on the results of Cisco. Search Cisco dependence on traditional routers and switches continue to fall compared to total sales as the transformation of Robbins progresses.
Another approach Cisco is its push for software subscription model. The advantage of the software is quite clear: it is a necessity in a world moving to the cloud and objects (IO) the Internet, and generates a recurring revenue base through a license. 8% jump last year in total sales reported at $ 16.5 billion was driven by 33% increase in software and subscriptions.
For IBM
Fortunately for shareholders to IBM, analysts have finally started to realize his shift first quarter results are not only measured by total revenues. Cisco, IBM CEO Ginni Rometty is still in the midst of a transformation of sales away years of the company and the equipment of the old school to the strategic imperatives above.
Based on the results of the last quarter and the corresponding response of investors, IBM turned the proverbial corner. Revenue declined 3% to $ 20.2 billion, and GAAP earnings (including non-recurring items) per share also sank 27% to $ 2.61. However, due to the decline in earnings per share (EPS) is largely due to IBM sinking more than $ 5 billion in 11 acquisitions this year. Investments in key areas such as cloud, big data and analysis will continue as IBM strengthens its strategic imperatives and already working.
sales are tracking cloud IBM annually at a rate of $ 11.6 million, a staggering figure that continues to rise and positions IBM as the industry leader. Equally important, over the past 12 months, revenue from cloud services from IBM - a market that is expected to generate a huge income by $ 204 million this year - increased by over 50% in Q2 of $ 6.7 billion.
Decide between Cisco and IBM is a decision "flip-a-coin", as the two are positioned for growth in some of the fastest growing technology markets. However, IBM's leadership in cloud solutions, and analysis that provide customers with practical actions the results of all these data, gives the slight advantage. growth and long-term income investors - Cisco has a 3.3% dividend, 3.5% and IBM - will not go wrong with either.
