Cisco Hits Top Earnings Estimates as Product Orders Improve - Latest Global News

Cisco Hits Top Earnings Estimates as Product Orders Improve

Cisco systems (CSCO) on Wednesday reported fiscal third-quarter earnings and revenue that fell from a year ago but beat consensus estimates as product orders improved from a year ago. The company’s sales forecast for Cisco shares in the current July final quarter was above expectations.




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The computer networking giant reported financial results after the market closed. The pro forma results included recently acquired Splunk for the first time. The deal closed on March 18. Splunk increased revenue by $413 million in the third quarter.

“Revenue, gross margin and EPS were at or above our guidance range in the third quarter, both with and without Splunk, resulting in continued operating leverage,” Scott Herren, chief financial officer, said in the earnings release. “Customers are consuming the devices delivered in recent quarters in line with our expectations and we are seeing demand stabilizing as a result.”

Cisco profit fell 12% year over year to an adjusted 88 cents. Sales fell 13% to $12.7 billion. According to FactSet, analysts estimated Cisco would earn 83 cents on revenue of $12.53 billion.

On the stock market today, Cisco shares rose 4.4% to 51.86 in extended trading.

CSCO Stock: Sales Outlook

For the July quarter of fiscal 2024, Cisco forecast a midpoint profit of 85 cents versus analyst estimates of 86 cents.

Additionally, Cisco expects revenue of $13.5 billion at the midpoint of its guidance. Analysts forecast a 13% decline in sales to $13.25 billion.

While Cisco has increased its software and services revenue, the company still generates over two-thirds of its revenue from computer networking equipment, primarily switches and routers. As the enterprise market has weakened, Cisco’s telecom customers are also spending less.

Cisco Stock: Splunk Deal

According to IBD Stock Checkup, the company had a weak Relative Strength Rating of 24 out of a maximum of 99 in Cisco’s earnings report.

CSCO stock was down 2% in 2024 ahead of its fiscal third-quarter earnings report.

Meanwhile, Cisco acquired software maker Splunk for $28 billion in cash. Splunk has its roots in data analytics software and has expanded into cybersecurity.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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