Cisco (CSCO) reported fiscal first-quarter earnings that beat analyst expectations, with revenue up 7% year-over-year and EPS beating estimates. The company also announced a two-for-one stock split. The news caused investors to buy shares of Cisco stock. But the results weren’t all good. Cisco was still hit by higher freight and component costs, which hurt its overall margin.
Analysts’ estimates for cisco’s fiscal first-quarter earnings
Cisco’s fiscal first-quarter earnings topped analyst expectations, but the turnaround remains a work in progress. Cisco’s revenue was down 4% from last year’s first quarter, according to Cisco’s guidance. However, its revenue guidance for the full year 2023 was above consensus expectations.
In recent years, Cisco has been under fire from Wall Street because of its atypical growth strategies and lack of focus on its core businesses. However, this quarter, the company reported fiscal first-quarter earnings of $1 billion, or $0.14 per share. Revenue was $11.3 billion, up 2 percent. Analysts had expected the company to post earnings of $0.13 a share.
Cisco reported fiscal first-quarter earnings after the market closed Wednesday. The company reported adjusted earnings of $3.5 billion, or $0.86 per share. This was a 19% beat on Wall Street’s first-quarter estimate. Cisco also provided guidance for the full fiscal year, which is expected to be slightly less than this quarter’s results.
Analysts’ estimates for Cisco’s fiscal year ended in April, and the company is targeting a full-year earnings range of $3.50 to $3.58 per share. This beats analysts’ expectations, and the company’s shares have soared. Cisco’s revenue and earnings were up almost 30 percent from a year ago. The stock’s price has been rising since then, resulting in a record high.
The stock’s Put/Call ratio is currently at 0.97 and remains neutral. Cisco currently has a Zacks Rank of #3. Use the Earnings ESP Filter to find the best stocks to buy before they report. With a Zacks ESP of +1.46%, Cisco has an excellent chance of beating estimates and improving its stock price.
cisco’s revenue grew 7% Y/Y
Cisco’s revenue grew 7% y/y during the first quarter of 2019. The company’s revenue was largely driven by software, but there is also a strong ARR component. The company continues to execute on its transition to software and ARR. However, Cisco’s growth rate is slowing after a strong year in 2018.
Cisco’s third quarter results beat analyst expectations, resulting in revenue growth of 4% year-over-year. On a GAAP basis, Cisco reported a profit of $0.73 per share. On a non-GAAP basis, the company posted a net income of $3.6 billion. Its revenue was up 3% in product revenue and down 8% in services. Its revenue was split among three divisions: Americas, EMEA, and APJC. Its top five revenue categories were Secure, Agile Networks, End-to-to-security, Optimized Application Experiences, and Collaboration.
Cisco has reorganized its business into segments, based on product types. Data center networking switches and software-defined networking are under the Secure, Agile Networks category. Its Internet for the Future category is comprised of silicon and optical products. The company also added a new category called Hybrid Work, which includes collaboration products such as Webex.
The company’s results continue to trend upward. Cisco is at the intersection of several favorable industry trends, including continued shifts to cloud computing, security at all points in the stack, and 5G. It also continues to make wise choices about its suppliers. With its dividend yield of 2.5%, Cisco looks like a great value at the moment.
Cisco returned $1.8 billion to its shareholders in the first quarter, paying a quarterly dividend of 38 cents per share and repurchasing $286 million worth of shares. Cisco’s current share buyback program continues to provide benefits for shareholders, with $7.7 billion shares remaining and no termination date. Cisco’s revenue for fiscal year 2022 is forecast to increase between two and four percent y/y. The non-GAAP gross margin for the year is expected to be around 63%.
Does CISCO Revenue Ever Slow Down?
The company’s revenue growth slowed down in some of its areas. While the company’s business is booming, the company’s supply chain issues are hurting the company’s growth rate. Cisco also faces problems in the service provider market. However, the company’s strong results should help other vendors through Enterprise Technology.
In the most recent quarter, Cisco reported better-than-expected revenue and earnings. The company reported a net income of $2.4 billion, compared to 27 cents per share in the year-ago quarter. The adjusted earnings beat analysts’ expectations by two cents per share. Revenue rose 7% y/y, which beat analysts’ consensus estimates. Strong results in routing and switching are partly attributed to a stronger U.S. dollar.