Chuck Robbins, CEO of Cisco
Ashlee Espinal | CNBC
Cisco shares fell as much as 6% after the close of trading on Wednesday after the company gave fiscal second-quarter earnings that came in below analysts’ estimates.
Here’s how the company did:
- Earnings: Excluding certain items, 84 cents per share, vs. 81 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $13.16 billion, vs. $13.09 billion as expected by analysts, according to Refinitiv.
Cisco’s revenue grew 1% on an annualized basis in the quarter, which ended on October 26, according to a statement.
As for guidance, Cisco said it expects 75 cents to 77 cents in earnings per share, excluding certain items, and an annualized revenue decline of 3% to 5% in the fiscal second quarter. Analysts polled by Refinitiv had expected 79 cents in earnings per share, excluding certain items, on $12.77 billion in revenue, which implied 2.6% growth.
If the company’s revenue does go lower year over year in the next quarter, it would be for the first time since 2017. Cisco had a run of eight consecutive quarters of revenue declines.
In the fiscal first quarter Cisco’s largest business segment, Infrastructure Platforms, including switches and routers for companies’ data centers, produced $7.54 billion in revenue, down 1% year over year and missing the $7.61 billion estimate among analysts surveyed by FactSet.
Cisco’s Applications segment, including unified communications and AppDynamics, ended the quarter with $1.50 billion in revenue, higher than the $1.48 billion FactSet consensus estimate. Cisco’s security business had $815 million in quarterly revenue, more than the $723.1 million FactSet consensus.
On Monday Piper Jaffray analyst James Fish told clients that he has lowered his Cisco rating to neutral from the equivalent of buy. “Over the last few years, the macro-environment has provided a tailwind for networking vendors like Cisco. While digital transformation remains ongoing, we see less spending by Cisco’s customers as likely over the NTM,” Fish wrote.
Cisco stock was up 12% year to date.
Executives will discuss the results with analysts on a conference call at 4:30 p.m. Eastern time.
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