Cisco systems (CSCO) reported adjusted earnings and revenue for its fiscal second quarter of 2021 that exceeded the analysis estimates. Cisco shares fell in extended trading on Tuesday as earnings guidance for the current April quarter met expectations.
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In the quarter ended Jan. 23, Cisco earnings rose 2 percent to 79 cents a share from a year earlier, the company said. Revenue is $ 12 billion, almost equal to the previous year.
As corporate spending on network infrastructure slows amid a shift to remote work during the coronavirus emergency, analysts say the big question is whether Cisco can get the pull in cloud computing centers. In that market, Arista Networks (ANET) is Cisco’s main competitor.
A year earlier, Cisco’s earnings were 77 cents a share on sales of $ 12.01 billion. Analysts had expected Cisco’s 76 cents earnings at $ 11.92 billion in sales.
Cisco shares fell 3.3% today to 46.88 in extended trading on the stock market.
Cisco revenue list meets expectations
For the current April quarter, Cisco earnings are expected to be 81 cents in the middle of its lead, in line with estimates. Cisco expects revenue to increase by 4.5%. Analysts predicted revenue would rise by about 3% to $ 12.36 billion.
However, Cisco’s third quarter of 2021 will have 14 weeks compared to 13 weeks for the same quarter in fiscal 2020. In a release, Cisco said it is ‘reflected in the lead’.
In the January quarter, Cisco repurchased $ 801 million of its own stock. Cisco has $ 9.2 billion left in a buyback program.
From a technical point of view, Cisco stocks formed a handle with an entry point of 46.56. Cisco’s share weakened the S&P 500 in 2020. However, Cisco stocks fell from a low of 35.28 on October 29 amid a market rotation to appreciate stocks.
According to the IBD Stock Checkup, Cisco shares had a relative strength rating of only 37 out of a possible 99 in the Cisco earnings report.
The company deviated from its core business of selling network switches and routers. Through acquisitions, Cisco aims to increase revenue from software and services.
The dividend-paying Cisco share remains one of the best U.S. technology companies when it comes to cash on its balance sheet. However, the repurchase of shares in Cisco has declined.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cyber security and cloud computing.
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