Cisco issues upbeat guidance despite 13% hit to revenue in Q3

on May 15, 2024
  • Cisco reported its financial results for third quarter on Wednesday.
  • Here's what its CEO Chuck Robbins said in a press release today.
  • Cisco stock is now up more than 10% versus its year-to-date low.

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Cisco Systems Inc (NASDAQ: CSCO) is pushing to the upside in extended hours on Wednesday after reporting market-beating financial results for its third quarter.

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Cisco stock rallies on upbeat guidance for Q4

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Investors are cheering also because the management issued upbeat guidance for the future. $CSCO now forecasts its revenue to fall between $53.6 billion and $53.8 billion on up to $3.71 a share of adjusted EPS in fiscal 2024.

Analysts, in comparison, were at $53.14 billion and $3.67 per share, respectively. Chuck Robbins – the chief executive of Cisco Systems said in a press release today:

Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the AI era.

The Nasdaq-listed firm saw its product revenue tank 19% in the recently concluded quarter which was partly offset by a 6.0% increase in its services revenue. Cisco stock is now up more than 10% versus its year-to-date low.  

Cisco Q3 earnings snapshot

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  • Earned $1.90 billion versus the year-ago $3.20 billion
  • Per-share earnings also went down from 78 cents to 46 cents
  • Adjusted EPS printed at 88 cents a share as per the earnings report
  • Revenue declined 13% year-over-year to $12.7 billion
  • Consensus was 82 cents a share on $12.53 billion in revenue
  • Splunk revenue came in at $413 million for the third quarter
  • Improved gross margin by 170 basis points in fiscal Q3
  • Annual recurring revenue of $29.2 billion was up 22%
  • Ended Q3 with $38.8 billion of remaining performance obligations

Cisco increased its quarterly dividend by 2.5% to 40 cents per share on Wednesday. According to its CFO Scott Herren:

Customers are consuming equipment shipped in line with our expectations and we are seeing stabilization of demand as a result. The addition of Splunk to our product line will be a catalyst for further growth.


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