Cisco stock gains after earnings and outlook top estimates

Cisco Systems Inc. shares rose in the extended session Wednesday after the networking company’s earnings and outlook topped Wall Street estimates.

Cisco CSCO, -0.32% shares advanced about 3% in after-hours trading, following a 0.3% decline to close at $43.86 in the regular session. For the year, Cisco shares are up 14.5% while the Dow Jones Industrial Average DJIA, -0.54% which counts Cisco as a component, is up 1.8%, the S&P 500 index SPX, -0.76% has gained 5.4%, and the tech-heavy Nasdaq Composite Index COMP, -1.23% has advanced up 12.6% in the same period.

The company reported fiscal fourth-quarter net income of $3.8 billion, or 81 cents a share, compared with $2.42 billion, or 48 cents a share, in the year-ago period. Adjusted earnings were 70 cents a share, and revenue rose to $12.84 billion from $12.13 billion in the year-ago period.

“We had a very strong finish to a great year and generated our highest quarterly revenue of $12.8 billion,” Cisco Chief Executive Chuck Robbins said in a statement.

Of the 27 analysts surveyed by FactSet, Cisco on average was expected to post adjusted earnings of 69 cents a share. The company had forecast earnings of 68 cents to 70 cents a share. Wall Street had expected revenue of $12.77 billion, according to 25 analysts polled by FactSet. Cisco predicted revenue of $12.62 billion to $12.86 billion.

Cisco reported product revenue of $9.64 billion, above the Wall Street consensus of $9.53 billion. The company reported infrastructure platform revenue of $7.44 billion, compared with the $7.28 billion Street consensus. Applications revenue was $1.34 billion, just shy of the $1.4 billion that analysts expected on average. Security revenue was $627 million, above the $614.8 million expected by the Street. “Other products” revenue was $232 million, compared with the Street’s expectations of $255.9 million.

Services revenue, however, came in at $3.20 billion, a hair short of the Street consensus of $3.22 billion. In the previous earnings report, Cisco shares fell after its services revenue came in light.

For the first fiscal quarter, Cisco estimates adjusted earnings of 70 cents to 72 cents a share on revenue of $12.74 billion to $12.99 billion, while analysts expected earnings of 69 cents a share on revenue of $12.58 billion.

Get the top tech stories of the day delivered to your inbox. Subscribe to MarketWatch's free Tech Daily newsletter. Sign up here.

Source: Read Full Article