Dallas, Texas 08/19/2013 (Financialstrend) – Cisco Systems, Inc. (NASDAQ:CSCO) is planning or rather confirmed the spending of a whooping half a billion dollars to lay off 4,000 workers. The San Jose company will take pre tax charges estimating up to $550 million for the layoffs that accounts for about 5% of its employees.
These charges will form a part of severance payments, termination benefits for the workers as well as the overhead costs related to the layoffs. A sum varying between $250 and $300 million is what the company will charge in the first quarter of the fiscal 2014. The current quarter of the company’s fiscal year ends in the month of July.
Cisco’s Fourth Quarter Profits On A High
The Cisco Systems reported a net income of $2.27 for the fourth quarterly period, which is much higher than the last year’s figure of $1.92 billion. This is proof of the fact that there has been a substantial rise in the company’s profit in the present quarter. The adjusted net income witnessed a rise to $2.85 billion or $0.52 per share this year in comparison to $2.53 billion or 0.47 per share the previous year.
According to the analysts reports, the revenues for this quarter have grown by 6.2 percent.
Cisco Systems Inc. Witnesses A 1- Month Low After Q4 Report
On Wednesday, the company was on a high as the profits of the fourth quarter seen a considerable increase as compared to the figures last year. The adjusted EPS this year was $0.52 in contrast to last year’s $0.47 last year. Revenues grew by 6.2 percent from $ 11.69 billion to $12.42 in a year.
However, on Thursday the stock closed down by 1.89 at $24.49 with volume at a three month high. The company, hence, witnessed a 1 month low and fell below its 50 day moving average playing a spoilsport to the happiness of considerable rise in profits of the fourth quarter.
Cisco Systems Price Target Slashed
The stock analysts at Wedbush went about decreasing their price targets on shares of Cisco Systems. From $28 to $ 27 according to a report published on Thursday. This target price by Wedbush recommends a potential upside of 10.27% from the stock’s previous close.