Shares of Cisco Systems Inc. (CSCO) gained nearly 5% in extended trading hours on Wednesday after the company’s second-quarter profit and revenues trumped street estimates. Cisco also lifted its earnings outlook for the full year and authorized a $15 billion stock buyback plan.
San Jose, California-based Cisco System’s second-quarter profit rose to $2.97 billion or $0.71 per share from $2.55 billion or $0.60 per share last year.
On an adjusted basis, earnings for the quarter were $3.5 billion or $0.84 per share for the period, compared to $3.4 billion or $0.79 per share a year ago. On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.81 per share. Analysts’ estimates typically exclude special items.
Cisco said its revenues for the quarter grew 6% to $12.72 billion from $11.96 billion last year. Analysts had a consensus revenue estimate of $12.65 billion for the quarter. The company reported product revenue growth of 9% and service revenue down 1%.
“We continue to see incredibly strong demand across our portfolio, emphasizing the criticality and relevance of Cisco’s innovation,” said Chuck Robbins, chair and CEO of Cisco. “Our robust order strength, record backlog and double-digit growth in annual recurring revenue position us well to deliver growth.”
Further, Cisco declared a quarterly dividend of $0.38 per common share, a 1-cent increase or up 3% over the previous quarter’s dividend, to be paid on April 27, 2022 to all stockholders as of April 6, 2022.
Cisco’s board of directors has also approved a $15 billion increase to the authorization of the stock repurchase program. The remaining authorized amount for stock repurchases including the additional authorization is around $18 billion.
Looking forward to the third quarter, Cisco expects adjusted earnings of $0.85 to $0.87 per share and revenue growth of 3% to 5%. Analysts currently estimate earnings of $0.86 per share.
For the full year 2022, the company expects adjusted earnings of $3.41 to $3.46 per share and revenues of 5.5% to 6.5%. Analysts currently estimate earnings of $3.68 per share on revenue growth of 5.20%.
Previously, the company expected adjusted earnings of $3.38 to $3.45 per share and revenue growth of 5% to 7%.
CSCO closed Wednesday’s trading at $54.25, down $0.02 or 0.04%, on the Nasdaq. The stock, however, gained $2.65 or 4.88%, in the after-hours trading.
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