Cisco Systems Inc.’s stock rose in extended trading Wednesday after the networking-technology company delivered better-than-expected numbers on the top and bottom line, and offered encouraging guidance.
Cisco
CSCO,
reported a fiscal first-quarter net income of $2.7 billion, or 65 cents a share, compared with net income of $3 billion, or 70 cents a share, in the year-ago quarter. Adjusted earnings were 86 cents a share. Revenue was $13.6 billion, up 6% from $12.9 billion a year ago.
Analysts surveyed by FactSet had expected on average net income of 84 cents a share on revenue of $13.3 billion. Shares gained more than 5% in after-hours trading immediately following the results, after closing down 1% in regular trading Wednesday at $44.39.
“Our fiscal 2023 is off to a good start as we delivered the largest quarterly revenue and second-highest quarterly non-GAAP earnings per share in our history,” Cisco Chief Executive Chuck Robbins said in a statement announcing the results. During a conference call with analysts late Wednesday, Robbins noted “modest improvement” in component delivery amid an easing supply chain pipeline.
Cisco’s Product ($10.25 billion) and Service ($3.39 billion) businesses were up slightly year over year. Secure, Agile Networks, the company’s top business segment including data-center networking switches, hauled in $6.68 billion, up 12% from a year ago.
For the fiscal second quarter, Cisco executives guided for 84 cents to 86 cents a share in adjusted profit and revenue growth of 4.5% to 6.5%. Analysts were forecasting adjusted earnings of 85 cents and revenue of $13.24 billion, according to FactSet.
Shares of Cisco Systems have dwindled 30% this year, while the broader S&P 500 index
SPX,
has tailed off 17%.
In the days leading up to Cisco’s report, financial analysts had expected results and guidance in line with their modest expectations but warned of lingering supply-chain woes.
“We model 15-20% declines in orders [year-over-year] due to tough compares a year ago and stronger seasonality last quarter, but backlog should protect revenues for now,” Barclays analyst Tim Long said in a note to investors on Tuesday.
