Cisco Falls Despite Earnings and Revenue Beat

Cisco shares are lower even as the networking-equipment icon topped revenue and earnings estimates for the second quarter.
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Cisco Systems  (CSCO) - Get Report shares were lower after hours Tuesday despite the networking and communications equipment manufacturer reporting a second quarter beat.

The San Jose, Calif., company also said it was increasing its quarterly dividend by a penny a share to 37 cents, payable April 28 to holders of record April 6. 

The company reported adjusted earnings of 79 cents a share. Analysts surveyed by FactSet were expecting the company to report 76 cents. Revenue of $11.96 billion exceeded the FactSet consensus of $11.92 billion. 

"We are seeing encouraging signs of strength across our business showing how our technology will be a powerful engine for recovery and growth," Chief Executive Chuck Robbins said in a statement. 

"Our team delivered a strong performance as we partnered with customers on accelerating their digital transformation and driving secure, remote work."

Cisco shares at last check were down 3.4% at $46.87. 

For the current quarter, the firm expects earnings of 80 cents to 82 cents a share as revenue grows 3.5% and 5.5%. 

Analysts are expecting earnings of 81 cents on revenue growth of 2.8% in the quarter.

Last month, Cisco and Acacia Communications  (ACIA) - Get Report said they had agreed to a new $4.5 billion merger after a disagreement linked to regulatory clearance from China nearly derailed the deal. 

Cisco will pay $115 a share for Acacia, the company said, ending months of wrangling over the 2019 deal aimed at giving Cisco a clearer path into spending linked to 5G network rollouts. 

The transaction is expected to close during the third quarter, subject to a vote of Acacia holders, Cisco said. The company added that the companies have received all necessary regulatory clearances.