Cisco CEO Chuck Robbins takes part in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland, on January 18, 2023.
Holly Adams | Bloomberg | Getty Images
Cisco Shares rose 8% in extended trading Wednesday after computer networking maker ear reported fiscal second-quarter results that beat Wall Street expectations.
Here’s how the company did it:
- income: 88 cents per share, adjusted, versus 86 cents per share, as analysts expected, according to Refinitiv.
- income: $13.59 billion versus the $13.43 billion analysts were expecting, according to Refinitiv.
Cisco’s total revenue rose 7% year over year in the quarter ended Jan. 28, according to the statement. Net income fell about 7% to $2.77 billion.
Some of the components that make up Cisco’s hardware products remain limitations, but the company has indeed seen improvements across the board, CEO Chuck Robbins said on a conference call with analysts.
“Based on the consistency we’ve seen, demand remains steady,” he said.
Cisco’s business in the public sector is doing better than it has historically been, while in the service provider category, some customers are adapting to better deliver the company’s products to their environments, Robbins said.
The company called for adjusted earnings in the third fiscal quarter of 96 to 98 cents per share and revenue growth of 11% to 13%. Analysts polled by Refinitiv had expected adjusted earnings per share of 89 cents on revenue of $13.58 billion, implying growth of nearly 6%.
Cisco lifted its guidance for fiscal 2023 and now expects adjusted earnings per share of $3.73 to $3.78 and revenue growth of 9% to 10.5%. Both numbers are well ahead of analysts’ estimates.
But Cisco said the backlog is increasing year over year. The hardware and software backlog is still much higher than usual for Cisco due to limited supply availability, said Scott Herren, Cisco’s chief financial officer.
“We still have a very low cancellation rate, which remains below pre-pandemic levels,” Herren said.
Logistics costs have come down somewhat, he said.
In the fiscal second quarter, Cisco’s largest business segment, Secure, Agile Networks, which includes network switches for data centers, generated $6.75 billion in revenue. That’s 14% higher than the $6.52 billion consensus of analysts polled by StreetAccount.
The Future Internet division, which includes routed optical networking equipment, contributed $1.31 billion, down 1% from the StreetAccount consensus of $1.32 billion.
Revenue at Cisco’s Collaboration division, which includes Webex, fell 10% to $958 million, missing the StreetAccount consensus of $1.06 billion.
In the quarter, Cisco announced updates to its AppDynamics cloud application monitoring software and unveiled a restructuring plan that includes changes to its real estate portfolio.
Despite ​​the after-hours shift, Cisco shares rose about 2%, while the S&P 500 rose 8% over the same time period.
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