May 18, 2024

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Cisco Stock: Earnings Estimates Top as Product Orders Improve

Cisco Stock: Earnings Estimates Top as Product Orders Improve

Cisco Systems (cisco) on Wednesday reported fiscal third-quarter earnings and revenue that fell from a year earlier but beat consensus estimates as product orders improved from a year earlier. The company’s sales guidance for Cisco shares in the current quarter ending in July came in above expectations.




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The computer networking giant announced its financial results after the market closed. Initial results included recently acquired Splunk for the first time. The deal closed on March 18. Splunk added $413 million in fiscal third-quarter revenue.

“Revenue, gross margin and EPS in the third quarter were at or above the high end of our guidance range, including and excluding Splunk, resulting in sustained operating leverage,” CFO Scott Herren said in the earnings release. “Customers are consuming equipment shipped over the past few quarters in line with our expectations and we are seeing demand stabilize as a result.”

Cisco’s earnings fell 12% from a year earlier to 88 cents on an adjusted basis. Revenue fell 13% to $12.7 billion. Analysts estimate Cisco will earn 83 cents on revenue of $12.53 billion, according to FactSet.

On the stock market today, Cisco stock rose 4.4% to 51.86 in extended trading.

CSCO Stock: Revenue Forecast

For the July quarter of fiscal 2024, Cisco expects earnings of 85 cents at the midpoint of guidance versus analyst consensus estimates of 86 cents.

Cisco says it expects sales of $13.5 billion at the midpoint of its forecast. Analysts expected sales to decline 13% to $13.25 billion.

While Cisco has increased its software and services revenue, it still gets more than two-thirds of revenue from computer networking equipment, especially switches and routers. While the enterprise market has weakened, Cisco’s telecommunications customers are also spending less.

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Cisco Stock: Splunk Deal

Heading into Cisco’s earnings report, the company has a poor relative strength rating of 24 out of a best possible 99, according to IBD Stock Screener.

CSCO shares fell 2% in 2024, ahead of its fiscal third-quarter earnings report.

Meanwhile, Cisco acquired software maker Splunk for $28 billion in cash. With its roots in data analytics software, Splunk has expanded into cybersecurity.

Follow Reinhart Krause on Twitter @reinhardtk_tech For updates on artificial intelligence, cybersecurity, and cloud computing.

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