Biz Break: Cisco’s boring, and that’s OK with investors

Top Of The Order: 

Cisco Shines: OK, let’s understand something. There is nothing sexy about Cisco Systems.

Not that there’s anything wrong with Cisco. It’s just that this is a company that does most of what it does behind the scenes. Networking routers and switches and services don’t play as well in a TV commercial as do iPhones shooting 4K video. You could make an argument that the only time Cisco was really “cool” was back in 2009, when it paid $590 million for Pure Digital, the maker of the then-popular line of Flip Video digital video cameras.

And whether it was because a consumer gadget didn’t fit in with its traditional networking gear business, or people just didn’t buy enough Flips once they really got into shooting video on their iPhones, Cisco shut down Flip, and stopped making its video cameras in 2011. That’s not a big window of coolness.

But Cisco survived, and remains what it is, one of the true bellwethers of the corporate tech marketplace. When Cisco does well, it’s seen as an article of faith about the state of corporate technology purchases, and corporate business outright. And on Thursday, Cisco’s shares rose 3.2 percent to close at $27.57 after the company reported one of its typically solid business quarters.

So, in case you missed it…Late Wednesday, Cisco reported fiscal third-quarter earnings of 57 cents a share on $12 billion in sales, while Wall Street analysts had forecast the company to earn 55 cents a share on $11.97 billion. Cisco also said that for its fourth quarter, it expects to earn 59 cents to 61 cents a share, while analysts had forecast a profit of 58 cents a share.

And while it may be seen as an old-tech company, Cisco is learning some new tricks. Chief Executive Chuck Robbins has put more emphasis on security technology, especially that for wireless networks, and such sales rose 17 percent from a year ago. By contrast, sales of routers were off by 5 percent and switching-gear revenue declined by 3 percent.

No, it’s not the kind of stuff that will have the cool factor of something like a 50-foot-high green wall and a park where you can wander in and contemplate whether you should get the 64-gigabyte or 128GB iPhone 6 Plus. But by pressing along, claiming a little ground along the way, Cisco remains about as solid a presence in the tech sector as there is right now. And maybe that will just be cool enough.

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Middle Innings:

Can We Just Call Him “Big Mac”?: If Cisco is boring, yet consistent, anything involving John McAfee is going to be like 17 straight rides on Disneyland’s Big Thunder Mountain Railroad without being strapped into your seat.

It was barely a week ago, that McAfee, founder of McAfee, one of the first big anti-virus software companies, one-time-kinda-but-not-really fugitive from Belize, and current Libertarian Party presidential candidate, was named Chief Executive to MGT Capital Investments. Actually, it was more like McAfee took over the company, as part of his joining MGT was it acquiring his latest venture, anti-spy technology company D-Vasive, and saying it would rename itself John McAfee Global Technologies.

So, it should come as no surprise that investing in a John McAfee company would be as wild an experience as McAfee being McAfee. On Thursday, MGT (The company hasn’t officially taken on John McAfee’s moniker, yet) saw its shares surge 11.5 percent. Now, that was only 30 cents, and the stock ended the day at $2.92 a share. And that was a day after MGT’s shares fell almost 37 percent…a loss that came a day after MGT soared by 40 percent.

Maybe chaos just follows McAfee, and that’s what’s driving MGT’s whipsaw-like stock market performance. After all, McAfee’s joining the company was meant to lead MGT into the security-technology market after it had been focused on online and mobile gaming. But on Wednesday, it was disclosed that MGT had made a sizable investment in a pharmaceutical company. There are also recent acquisitions and sales of large chunks of MGT stock that suggest few are sure about which way this company is going to go.

Whichever way it is, you can look for McAfee behind the wheel. And if the Libertarian thing works out, you may see McAfee on the ballot this fall, too.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Thursday…

Movin’ On Up: Gains came from Glu Mobile, Marketo, Tesla Motors and SolarCity.

In The Red: Lending Club gave up more than 7 percent amid the fallout of a Department of Justice investigation regarding how some loans were made that involved the online loan marketplace. Other decliners were NeoPhotonics, Oclaro, SunPower and YuMe.

The tech-focused Nasdaq Composite Index gave up 0.6 percent to close at 4,712.

The blue chip Dow Jones Industrial Average shed 0.5 percent to end the day at 17,435.

And the broad-based Standard & Poor’s 500 Index gave up 0.4 percent to slip to 2,040.

Quote Of The Day: “Nothing prepared me for being this awesome. It’s kind of a shock. It’s kind of a shock to wake up every morning and be bathed in this purple light.” — Bill Murray

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Photo: A sign outside of Cisco Systems headquarters in Santa Clara. (AP/Paul Sakuma, File)


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