Cisco Systems (CSCO) - Get Report, the technology networking giant, announced a $2.5 billion financing program in response to the coronavirus pandemic that allows customers to defer 95% of their payments due this year until next year.
"Cisco's customers and partners are under enormous pressure to keep their businesses connected while remaining productive and secure," Cisco CEO Chuck Robbins said in a statement.
"Whether it's technology, financing or helping those most in need, Cisco is committed to working together to fight this pandemic on every front," he said.
As the coronavirus pandemic has sent many workers home, internet activity has soared, leading to more usage of Cisco’s networking equipment.
And, of course, the at-home workers are deploying video conferencing and virtual private network software in a big way, which can include Cisco's Webex and AnyConnect.
The financing program offers a complete break from payment by Cisco’s customers for three months. They then pay 1% of the money they owe in each of the last five months of the year.
Cisco appears to be the only top technology company offering such an opportunity to its customers. The program is available around the world.
Morningstar analyst Mark Cash likes the company. It “continues to execute on its strategic focus of increasing recurring revenue via selling software and services to supplement its hardware products,” he wrote in a report last week.
Cash places fair value for the stock at $48.
It recently traded at $42.26, up 2.54%. It has dropped 12% over the past three months, compared to a 14% fall for the S&P 500.