wall street

CISCO SYSTEMS INC., $21.53, Nasdaq symbol CSCO, reported higher-than-expected earnings in its latest quarter. However, it expects weaker sales in the current quarter. That caused the stock to drop 8% this week. The company is a leading maker of hardware and software that links and manages computer networks. Its hardware includes routers, local area network (LAN) and asynchronous transfer mode (ATM) switches, and dial-up access servers. In Cisco’s 2014 first quarter, which ended October 26, 2013, its earnings rose 11.6%, to $2.9 billion from $2.6 billion a year earlier. Earnings per share rose 10.4%, to $0.53 from $0.48, on more shares outstanding....

GENERAL ELECTRIC CO. (New York symbol GE; www.ge.com) continues to shrink its GE Capital subsidiary, which provides loans and other financial services to buyers of its industrial products, such as power-transmission gear, jet engines and locomotives....

DUN & BRADSTREET CORP., $111.45, New York symbol DNB, provides credit reports on over 230 million companies. Its clients use this information to make lending and buying decisions. In the three months ended September 30, 2013, Dun & Bradstreet’s earnings fell 8.5%, to $72.8 million from $79.6 million a year earlier. The company spent $55.0 million on share buybacks in the quarter. Due to fewer shares outstanding, earnings per share rose 6.3%, to $1.87 from $1.76. The lower overall earnings are partly because the company continues to invest in new products and improve the quality of its data. It has also discontinued less profitable products and closed unneeded facilities, which resulted in one-time severance payments and other costs....

HEWLETT-PACKARD CO. (New York symbol HPQ; www.hp.com) is a leading maker of personal computers and printers. It also makes server computers and networking products for businesses....

APPLE INC., $520.03, Nasdaq symbol AAPL, sold 33.8 million iPhones in the three months ended September 28, 2013. That’s up 25.6% from 26.9 million a year earlier. The gain is partly due to strong sales of its new premium 5S and lower-priced 5C models, which the company started selling just a few days before the end of the quarter. Strong demand in Latin America, the Middle East, Russia and India also contributed to the higher sales. As a result, Apple’s overall revenue in the quarter rose 4.2%, to $37.5 billion from $36.0 billion a year earlier. iPhones supplied 52% of the total....

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MCKESSON CORP., $154.99, New York symbol MCK, rose 10% this week to a new all-time high after it agreed to buy Celesio AG, a Germany-based firm that distributes prescription drugs in Europe and Brazil. The company will pay $8.3 billion for Celesio, which includes its debt. This is a big purchase for McKesson, which has a market cap of $35.4 billion. The deal should close sometime in 2014. The combined company will have annual revenue of $150 billion, and will serve over 120,000 hospitals and pharmacies in more than 20 countries. That will cut McKesson’s reliance on the U.S., which currently accounts for 90% of its revenue. The company’s bigger size will also help it negotiate lower prices from pharmaceutical makers....

The p/e ratio—the ratio of a stock’s price per share to its earnings per share—is an extremely crude way to measure investment value. It’s a mistake to buy a stock just because it has a low p/e. At times, it can also be a mistake to stay out of a stock just because of a high p/e. In either case, of course, you need to look more closely and try to figure out why the p/e is high or low. Only then can you begin to make an informed decision. Some investors zero in on low-p/e stocks—price under 10.0 times earnings, say. They make some great buys that way, but this rule can also lure them into investment minefields. Often, stocks have low p/e’s because informed investors recognize their earnings are highly uncertain or headed way down. Buying these stocks is never a bargain when the bad news is not yet widely known. When the bad news hits the front pages because the company’s earnings have collapsed, however, that can be a good time to buy. At that time the p/e is way up, because the “e” is much lower....

ARM Holdings plc (ADRs), $49.32, symbol ARMH on Nasdaq (ADRs outstanding: 466.4 million; Market cap: $23.5 billion; www.arm.com) designs chips and software for a variety of electronic devices, including cellphones, tablets, network routers, digital cameras and automobile-control systems. The Cambridge, U.K.-based company does not make its chips. Instead, it earns royalties by licensing its technology to makers of electronic products. Its major customers include Qualcomm, Samsung and Nvidia. Apple is also using ARM’s technology in its A7 processors, which power its new iPhone 5S. Intel is challenging ARM’s dominance of the mobile market and has gained momentum in smartphones since introducing its Medfield chips in 2012. Intel is scheduled to roll out its new design, called Silvermont, by the end of this year. That will help it further compete in the mobile chip market....

GOOGLE INC., $1,011.41, Nasdaq symbol GOOG, jumped 14% on Friday after the company reported better-than-expected earnings and revenue. In the three months ended September 30, 2013, earnings rose 23.3%, to $3.6 billion from $3.0 billion a year earlier. Due to more shares outstanding, earnings per share rose at a slower rate of 21.1%, to $10.74 from $8.87....