(Story updated with CEO and CFO remarks)
NEW YORK ( TheStreet) -- Cisco (CSCO) was surging 7.7% to $22.85 in extended-hours trading after the biggest maker of computer-networking equipment beat on both top and bottom lines for its fiscal third quarter.
"We are well-positioned in major tech global growth markets," CEO John Chambers said during the company's earnings call. "It was another very solid quarter even with the challenging global macro backdrop."
"For six straight quarters, Cisco has grown profits faster than revenue," CFO Frank Calderoni added. Cisco completed "two more acquisitions in software and cloud ... both of these acquisitions meet business objectives to increase growth and innovation."Cisco reported adjusted earnings of 51 cents a share on revenue of $12.2 billion, exceeding the average analyst earnings estimate of 49 cents a share on revenue of $12.18 billion. Gross margin held steady at 63% compared to the same period a year ago. Product revenue rose to $9.559 billion from $9.106 billion, while services revenue increased to $2.657 billion from $2.482 billion. Cash flows from operations were $3.1 billion for the third quarter, up from $3 billion a year ago. During the quarter, Cisco's combination of cash used for dividends and common stock repurchases totaled about $1.8 billion. For the fourth quarter, "we are managing business to account for a slow, steady recovery," said Calderoni. On a non-GAAP, year-over-year basis, he expects revenue growth of 4% to 7%, factoring in the divestiture of Linksys. He estimates that gross margins will come in at 61% to 62%, operating margins of 27.5% to 28.5%, and a tax provision rate of 21%. Calderoni expects earnings of 50 to 52 cents a share in the fourth quarter. Breaking down the outlook geographically, Chambers said during the call that Cisco will continue to face a challenging environment in China. On the other hand, he sees continued improvements in the business environments in Europe, the Middle East and Africa. "Europe has bottomed out," he said. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.
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