Cisco Systems shares rose in extended trading on Wednesday after the manufacturer of networking equipment reported quarterly revenue and earnings that beat analysts’ estimates.
Jordan Novet of CNBC.com had the news:
Here are the key numbers for Cisco’s fiscal second quarter:
- Earnings: 73 cents per share, excluding certain items, vs. 72 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $12.45 billion, vs. $12.41 billion as expected by analysts, according to Refinitiv.
Revenue increased by about 5 percent from a year earlier in the quarter, which ended on Jan. 26.
Cisco shares have jumped 9.6 percent so far this year, closing on Wednesday at $47.50. The stock rose 3.7 percent to $49.27 after the report.
Wallace Witkowski of MarketWatch.com reported that Cisco’s CEO also made positive comments:
CEO Chuck Robbins said on the call that Cisco’s product portfolio is “the best it’s been in years” and that economic fears have not dented sales.
“What I said several times, in a lot of interviews, is that I’ve been amazed at the resilience that we have seen around the world in light of the macro environment and the geopolitical dynamics, whether it’s a shutdown, or it’s U.S.-China trade, or it’s Brexit, or it’s stress in Italy, or it’s political unrest in certain emerging countries,” Robbins told analysts.
Cisco shares were up 4.2% after hours by the end of the company’s conference call with analysts, gaining some momentum from a 2.5% gain when the call started following the comments from Robbins. Cisco shares had closed down 0.8% at $47.50 for the regular session. In comparison, the Dow Jones Industrial Average which counts Cisco as a component, rose 0.5%, the S&P 500 index gained 0.3% and the tech-heavy Nasdaq Composite Index advanced less than 0.1%.
“What I will tell you is that our enterprise customers, given the focus, they really — they don’t view this technology anymore as an optional enabler of a strategy that they have come up with,” Robbins said. “They now view the technology as a core part of their strategy. So, I mean, many of the strategies they’re driving around revenue growth don’t work if they don’t continue to invest in technology.”
Tony Owusu of TheStreet.com reported Cisco also raised its dividend and announced a stock buyback:
“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.”
Separately, the company also announced that its board approved a $15 billion share buyback plan, and that it also increased its quarterly dividend by 6% to 35 cents per share, payable April 24 to shareholders of record on April 5.
For the current quarter, Cisco expects to earn between 76 cents and 78 cents per share on revenue growth between 4% and 6%. Wall Street was expecting the company to report earnings of 76 cents per share with revenue growth of 3%.
Cisco shares are up 18% over the last year and 12.7% year to date.
