Cisco recently reported its earnings and revenue for the fiscal third quarter, surpassing Wall Street’s expectations despite a decline in sales from the previous year. The company’s stock saw a significant increase of up to 8% in extended trading following the announcement. Key highlights from the report include:
The actual results reported by Cisco exceeded the projections made by LSEG consensus. The key figures were as follows:
– Earnings per share: 88 cents adjusted vs. 82 cents expected
– Revenue: $12.7 billion vs. $12.53 billion expected
Despite the positive financial results, Cisco experienced a 13% decline in revenue compared to the previous year, marking the steepest drop since 2009. The decrease in net income was even more drastic, falling by 41% to $1.89 billion, or 46 cents per share, from $3.21 billion, or 78 cents per share, in the prior year. The decline was attributed to clients completing the setup of equipment received in previous quarters.
Cisco CEO Chuck Robbins acknowledged the challenges faced by the company, expressing optimism about overcoming supply chain issues that have persisted for years. The acquisition of security software maker Splunk for $28 billion was highlighted as a significant strategic move. The deal had a marginal impact of one cent on Cisco’s adjusted earnings per share but contributed $413 million in additional revenue. Robbins emphasized the potential for existing Cisco customers to transition to Splunk solutions, indicating a positive outlook for growth.
In light of the quarterly performance, Cisco revised its fiscal 2024 revenue guidance to a range of $53.6 billion to $53.8 billion, up from the previously projected $51.5 billion to $52.5 billion. The company also narrowed its full-year adjusted earnings forecast to $3.69 to $3.71 per share. Looking ahead to fiscal 2025, Cisco anticipates revenue growth in the low- to mid-single digits. These projections reflect the company’s confidence in its ability to navigate challenges and drive future growth.
In a notable organizational change, Gary Steele, the former CEO of Splunk, was appointed as the president of go-to-market at Cisco. This move is expected to enhance the integration of Splunk’s capabilities within Cisco’s business operations. Additionally, Jeff Sharritts, Cisco’s chief customer and partner officer, is set to depart from the company.
Cisco’s fiscal third quarter results, while showing a decline in revenue and net income, demonstrate resilience and strategic foresight in overcoming challenges. The company’s focus on innovation, acquisitions, and strategic partnerships positions it for sustained growth in the evolving technology landscape. As Cisco continues to adapt to market dynamics and drive operational efficiencies, stakeholders can expect to see continued progress towards its long-term financial and strategic objectives.