Why Cisco’s Q2 Is Rock Solid
Cisco released better than expected fiscal second-quarter financial results after markets closed Wednesday.
Cisco Systems Inc. (NASDAQ: CSCO) released fiscal second-quarter financial results after markets closed Wednesday. The firm said that it had $0.77 in earnings per share (EPS) and $12.0 billion in revenue, compared with consensus estimates that called for $0.76 in EPS and $11.98 billion in revenue. The same period from last year had $0.73 in EPS and $12.45 billion in revenue.
Total revenue decreased 4% year over year, with product revenue down 6% and service revenue up 5%. Revenue by geographic segment was: Americas down 5%, EMEA down 3%, and APJC down 1%. Product revenue performance was led by growth in Security, up 9%. Infrastructure Platforms and Applications revenue were each down 8%.
Deferred revenue was $18.7 billion, up 8% in total, with deferred product revenue up 19%. Deferred service revenue was up 2%.
Looking ahead to the fiscal third quarter, the company expects to see EPS in the range of $0.79 to $0.81 and revenues declining in the range of 1.5% to 3.5% year over year. Consensus estimates are calling for $0.80 in EPS and $12.62 billion in revenue for the coming quarter.
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Chuck Robbins, board chair and CEO of Cisco, commented:
I am incredibly proud of the innovation our teams continue to drive. I am confident in our long-term growth opportunities as we help our customers build out the networks for the future.
Shares of Cisco closed Wednesday at $49.93, within a 52-week range of $43.40 to $58.26. The consensus analyst price target is $52.30. Following the announcement, the stock was initially up less than 1% at $50.20 in the after-hours session.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
