Cisco Systems (CSCO) reported fiscal first-quarter earnings that beat estimates, although product orders fell again. The company’s guidance for CSCO stock in the current quarter, which ends in January, was well below expectations.
For the period ended 28 October, Cisco’s earnings rose 29% to $1.11 per share. Revenue rose 8% to $14.7 billion. Analysts were expecting Cisco to earn $1.03 per share on revenue of $14.63 billion, according to FactSet.
On the stock market today, Cisco shares fell about 11% to 47.26 in extended trading. The computer networking giant reported earnings after the close.
Cisco stock: Revenue outlook misses estimates
For the January-March quarter of fiscal 2024, Cisco forecasts earnings of 83 cents at the midpoint of guidance, versus analyst estimates of 99 cents.
In addition, Cisco said it expects revenue of $12.7 billion at the midpoint of its outlook. Analysts are looking for revenue growth of 4.4% to $14.19 billion.
Capital spending by cloud computing and telecom customers is expected to slow in 2024. However, enterprise and government spending should be bright spots.
Heading into Cisco’s earnings report, the company had a Relative Strength Rating of 84 out of a possible 99, according to IBD Stock Checkup. CSCO stock has gained 11% so far in 2023.
In addition, CSCO stock has been diversifying away from its core business of selling network switches and routers. Through acquisitions, Cisco aims to increase its revenue from software and services.
In September, Cisco agreed to buy software company Splunk (SPLK) for $28bn in cash. The Splunk deal is expected to close in 9-12 months. With roots in data analytics software, Splunk has expanded into cybersecurity.
