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.
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