Cisco Scores With Earnings, Back in Guidance Game as Well

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Source: courtesy of Cisco Systems
Cisco Systems Inc. (NASDAQ: CSCO) reported its fiscal fourth-quarter financial results after the markets closed on Wednesday. The networking giant had $0.59 in earnings per share (EPS) on $12.8 billion in revenue, versus consensus estimates from Thomson Reuters that called for $0.56 in EPS on $12.65 billion in revenue. The same period from the previous year had $0.55 in EPS on $12.36 billion in revenue.

First and foremost, 24/7 Wall St has Cisco listed as one of the 10 stocks to own for the next decade.

The company gave guidance for its fiscal first-quarter EPS in a range of $0.55 to $0.57 and revenue growth in the range of 2% to 4% year over year. There are consensus estimates of $0.56 in EPS on $12.55 in revenue. What makes this significant is that Cisco has not given guidance in a long time.

Total gross margin and product gross margin were 62.1% and 61.0%, respectively.

In the fourth quarter of fiscal 2015, Cisco declared and paid a cash dividend of $0.21 per common share, roughly $1.1 billion. At the same time, the company repurchased about 35 million shares of common stock under its stock repurchase program at an average price of $28.62 per share for an aggregate purchase price of $1.0 billion.

Chuck Robbins, CEO of Cisco, commented on earnings and his first quarter at the helm taking over for John Chambers:

I’m stepping into the CEO role at an incredibly exciting time for Cisco. We closed out our fiscal year with record revenues and record non-GAAP EPS, for both Q4 and FY15. I’m particularly pleased with the strong growth of deferred revenue which shows we are very effectively driving our business to a more predictable software-based business model, at the same time as growing revenues and earnings.

He continued:

These strong results show what we are capable of when we’re focused, and you can expect us to continue to drive the evolution of our portfolio to maximize the value we bring to customers in today’s rapidly changing market. The network’s strategic role at the center of everything becoming digital — today and in the future — is why I strongly believe Cisco’s best years are ahead of us.

Cash flow from operations was $4.1 billion for the fiscal fourth quarter, compared to $3.0 billion sequentially and $3.6 billion year over year. On the books, Cisco had cash and investments totaling $60.4 billion, compared to $52.1 billion at the end of fiscal 2015.

Shares of Cisco closed Wednesday down 0.4%, at $27.90 in its 52-week trading range of $22.49 to $30.31. Following the release of the earnings report, shares were initially up 2.6% at $28.63 in the after-hours trading session. The stock has a consensus analyst price target of $31.17.

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