CSCO Stock: Cisco Earnings Top Estimates Amid Restructuring Plan

Cisco Systems (CSCO) reported fiscal first-quarter earnings and revenue that beat consensus estimates. CSCO stock rose on Thursday as the computer networking giant also announced a restructuring plan.


The company announced earnings after the market closed on Wednesday. Cisco’s earnings for the quarter ended Oct. 29 rose 5% year-over-year to 86 cents per share, beating Wall Street’s target. The company said its revenue rose 6% to $13.6 billion.

Analysts polled by FactSet had estimated Cisco’s earnings at 84 cents per share on revenue of $13.31 billion.

For the current quarter ending in January, Cisco said it expects earnings of 85 cents per share, in line with estimates. Cisco forecast revenue growth of 5.5% in the middle of its forecast, above estimates of 4% sales growth.

CSCO share: restructuring plan announced

In addition, Cisco announced a restructuring plan. The company said it would record pretax charges of about $600 million including severance and other one-time termination benefits, real estate charges and other costs. Cisco expects to record about $300 million in charges in the fiscal second quarter.

“Results were marginally better than expected, primarily due to a shrinking backlog and a relatively resilient environment,” Bank of America analyst Tal Liani said in a report. “Gross margin is expected to improve and the company announced a restructuring. Revenue and EPS beat $300 million and 2 cents, respectively, and guidance for fiscal 2023 was raised roughly by the first trimester beat factor.”

Cisco stock rose 3.1% to 45.79 in morning trade on the stock market today.

Heading into Cisco’s earnings report, the company had a relative strength rating of 42 out of the best possible 99, according to IBD Stock Check. CSCO’s stock was down 30% in 2022.

Additionally, CSCO’s stock has moved away from its core business of selling network switches and routers. With acquisitions, Cisco has sought to increase software and services revenue.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


Biotech stocks embrace neuroscience renaissance with Biogen and Amylyx at the helm

IBD Digital: Unlock IBD’s premium stock listings, tools and analysis today

Learn to Time the Market with IBD’s ETF Market Strategy

How to use the 10 week moving average to buy and sell

IBD Live: a new daily stock market analysis tool

Leave a Comment

Your email address will not be published. Required fields are marked *