Cisco Systems Inc (NASDAQ: CSCO)
Shares of Cisco Systems jumped 3.87% to $49.34 in after-hours trading on Wednesday after the company reported second-quarter earnings and revenue above estimates of Wall Street analysts. Cisco also improved its quarterly dividend and raised its share buyback program by $15 billion.
The manufacturer of networking equipment turned to cyber security and application software to offset slumping sales for its switches and routers as companies rapidly move to cloud services provided by Alphabet Inc., Amazon.com Inc, and Microsoft Corp rather than building their own networks.
CSCO Earnings & Outlook
Second-quarter net income came to $2.82 billion, or $0.63 per share, up from a loss of $8.78 billion, or $1.78 per share, in the same period last year. Earnings, adjusted for one-time items, were $0.73 per share, beating Refinitiv estimates by a cent.
The company posted revenue of $12.45 billion during the quarter, up 4.7% from $11.89 billion in the prior-year quarter. Analysts were expecting revenue of $12.41 billion, based on figures compiled by Refinitiv.
Security business revenue totaled $658 million, up 18% and ahead of $628.9 million estimates. Application software sales were $1.47 billion, up 24% year-over-year and above analyst estimates of $1.35 billion. Infrastructure platform business raked in revenue of $7.13 billion, up 6% from the same-period last year and ahead of $7.05 billion estimates.
Looking ahead, Cisco forecasts earnings of between $0.76 to $0.78 per share. It also views revenue growth of 4% to 6%, or $12.96 billion to $13.21 billion for the period. Analysts have called for third-quarter earnings of $0.76 per share on revenue of $12.84 billion.
The company also announced a 6% quarterly dividend hike to $0.35 per share.
Cisco Systems CEO Comments
“We are very pleased with our strong performance in the quarter,” said Chuck Robbins, chairman and CEO of Cisco. “Our teams are executing incredibly well, aggressively transitioning to a software model and accelerating our pace of innovation. We are redefining and connecting every domain of the networking infrastructure to deliver the agility, operational efficiency and security our customers require to embrace multicloud, edge computing and digital transformation.”
Cisco Systems, Inc. Profile
Cisco Systems, Inc. engages in the design, manufacture, and sale of Internet Protocol based networking products and services related to the communications and information technology industry. The firm operates through the following geographical segments: the Americas, EMEA, and APJC.
Its product comprises of the following categories: Switches, Routers, Wireless, Network Management Interfaces and Modules, Optical Networking, Access Points, Outdoor and Industrial Access Points, Next-Generation Firewalls, Advanced Malware Protection, VPN Security Clients, Email, and Web Security. The company was founded by Sandra Lerner and Leonard Bosack on December 10, 1984 and is headquartered in San Jose, CA. – CNN Money
