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Cisco’s non-GAAP profits rose higher than expected.
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Cisco
Shares in Systems rose lower, although management reported better-than-expected results for its fiscal second quarter and issued good financial forecasts for the current three-month period.
Although the results were strong, expectations rose before the announcement, so the figures may not have had the so-called whisper numbers – informal forecasts spread among investors. Cisco shares fell 5.4% to $ 45.90 in late trading.
For the quarter ended January 23, Cisco (ticker: CSCO) reported revenue of $ 12 billion, up from a year ago, and slightly ahead of the Street Consensus at $ 11.9 billion. The company predicted revenue would be up to 2% lower. The adjusted profit, which was not prepared according to generally accepted accounting principles, was 79 cents per share, above the range of 74 to 76 cents that a share management predicted and the street consensus at 76 cents.
According to Cisco, the total number of orders increased by 1% from the quarter in the previous year.
In an interview with Barron’s Late Tuesday, Cisco CEO Chuck Robbins said he thinks the company is “having a good quarter and continuing to recover.” He said Cisco had improved last quarter’s growth rates in each business segment, noting that it was returning to modest positive growth in the commercial business (which includes small and medium-sized customers) after three-quarters of negative growth at some point hits -25%.
The company predicted April revenue to be 3.5% to 5.5% higher than a year ago, ahead of Street’s consensus to make a 3% profit. Cisco said non-GAAP earnings for the quarter are likely to be 80 82 cents per share, in line with estimates at 81 cents.
Product revenue for the quarter was $ 8.57 billion, compared to consensus at $ 8.49 billion. Revenue from infrastructure platforms was $ 6.39 billion, 3% lower than a year ago, but slightly higher than the expected $ 6.2 billion. Application revenue was $ 1.35 billion, up from a year ago, and in line with estimates. Security income was $ 822 million, an increase of 10% over a year earlier, but slightly shy of expectations.
Revenue fell by 1% in the United States, by 2% in Europe, the Middle East and Africa, and by 4% in the Asia-Pacific, Japan and China.
The non-GAAP gross margin was 66.9%, compared to 66.4% a year earlier.
Cisco said it repurchased $ 801 million of its common stock at an average price of $ 42.82 per share during the quarter. The company has $ 9.2 billion left on its current repurchase authorization.
“According to the statistics, it was a good quarter,” Robbins said. “Now we need to deliver the third quarter and continue our momentum.”
Robbins noted that the company first broke out of its “web-scale” business, a reference to the major cloud providers. He said that Cisco had 100% growth in the business during the quarter, and that the cloud is a sector where Cisco is coming from behind and can increase market share. Robbins said traditional cable providers do strong business, but traditional telecommunications are slightly weak. Robbins continues to add Cisco to the forefront of the benefit of rolling out 5G wireless networks.
Robbins continued to see double-digit revenue growth from its WebEx video conferencing service, noting that the company plans to become ‘aggressive about marketing’ in the segment. While the company has boosted demand for industry verticals, particularly financial services and manufacturing, growth in the business segment has been dampened by continued software in segments deeply affected by the pandemic, such as travel and retail, the CEO said. Barron’s.
Write to Eric J. Savitz at [email protected]