This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cisco Surges as Sales, Profit Beats Forecasts

(Story updated with CEO and CFO remarks)

NEW YORK ( TheStreet) -- Cisco (CSCO - Get Report) 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.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CSCO $22.89 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs