Cisco Systems (CSCO) reported fiscal first-quarter earnings that topped estimates, though product orders fell again. The company’s guidance for CSCO stock in the current January-ending quarter came in well short of expectations.
For the period that ended Oct. 28, Cisco earnings rose 29% to $1.11 per share. Revenue climbed 8% to $14.7 billion. Analysts estimated that Cisco would earn $1.03 per share on revenue of $14.63 billion, according to FactSet.
On the stock market today, Cisco stock tumbled roughly 11% to 47.26 in extended trading. The computer networking giant reported earnings after the market close.
Cisco Stock: Revenue Outlook Misses Estimates
For the January quarter of fiscal 2024, Cisco forecasts earnings of 83 cents at the midpoint of guidance vs. analyst estimates of 99 cents.
In addition, Cisco says it expects sales of $12.7 billion at the midpoint of its outlook. Analysts predict 4.4% sales growth to $14.19 billion.
Capital spending by cloud computing and telecom customers is expected to slow in 2024. However, corporate and government spending should be bright spots.
Heading into the Cisco earnings report, the company owned a Relative Strength Rating of 84 out of a best-possible 99, according to IBD Stock checkup. CSCO stock had advanced 11% thus far for 2023.
In addition, CSCO stock has shifted away from its core business of selling network switches and routers. With acquisitions, Cisco aims to increase revenue from software and services.
In September, Cisco agreed to buy software company Splunk (SPLK) for $28 billion in cash. The Splunk deal is expected to close in 9-12 months. With roots in data analytics software, Splunk has expanded into cybersecurity.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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