Cisco stock price surges 6% on earnings beat

Shares of Cisco Systems (NASDAQ: CSCO) jumped 6% today after the tech giant reported better-than-expected results for its fiscal third-quarter. 

Fundamental analysis: Slowdown in business activity noted in April 

Cisco reported adjusted earnings of $0.79 per share, higher than $0.69 per share expected from the market. Moreover, the tech giant said it recorded a revenue of $11.98 billion, again better than $11.70 billion expected from Wall Street, but 8% lower compared to the year ago.

Cisco said that its biggest unit - Infrastructure Platforms - that generates more than half of the company’s revenue, recorded a 15% plunge in revenue on a year-to-year basis. Moreover, the orders slowed down in April, said Kelly Kramer, CFO of Cisco.

Cisco expects to earn between $0.72 and $0.74 in its fiscal fourth quarter, higher than $0.69 per share expected from the surveyed analysts. The expected profit is 8.5% to 11.5% lower compared to a year ago. 

Technical analysis: New 11-week high

Shares of Cisco surged higher following the better-than-expected results for the fiscal third quarter. The stock price went north of $44.50 for the first time since February. 

A close above $43.50 would pave the way for a stronger push higher given that this is a very important technical level for the price action, consisting of the 100-DMA and horizontal resistance. A pullback to this level is likely to facilitate an attractive opportunity to buy Cisco stock from the risk-reward perspective.

If the buyers are able to sustain the positive momentum, Cisco has room to move above $45 where the 200-DMA trades. 

Summary

Shares of Cisco are trading around 6% higher today after the tech giant topped analysts’ expectations for the fiscal third-quarter earnings and revenue. However, the company said it experienced a slowdown in orders in April, which is likely to weigh on the Q4 performance.