Cisco Systems Inc. (CSCO) - Get Report shares lead U.S. markets higher Friday after it posted stronger-than-expected first quarter earnings as services and security revenue offset a slump in sales for network equipment amid the global coronavirus pandemic.
Cisco said adjusted non-GAAP earnings for the three months ending in September, the group's fiscal first quarter, came in at 76 cents per share, down 9.5% from the same period last year and six cents ahead of the Street consensus forecast of 70 cents per share. Group revenues, Cisco said, were down 9.6% from last year to $11.9 billion, but came in just ahead of analysts' forecasts of an $11.85 billion tally.
Looking into the final months of the calendar year, Cisco said it sees revenues down by as much as 0.2% from last year and non-GAAP earnings in the region of 74 cents to 76 cents per share, compared to a Refinitiv forecast of 73 cents per share. Operating margins should be in the region of 32% to 33%, Cisco added.
"Cisco is off to a solid start in fiscal 2021 and we are encouraged by the signs of improvement in our business as we continue to navigate the pandemic and other macro uncertainties," said CEO Chuck Robbins. "Our focus is on winning with a differentiated innovative portfolio, long-term growth and being a trusted technology partner offering choice and flexibility to our customers."
"We see many great opportunities ahead as every company in every industry is accelerating its digital-first strategy," he added.
Cisco shares were marked 6.65% higher in early trading Friday to change hands at $41.20 each, a move that would edge the stock into positive territory for the past six months.
Products revenue was down 13.3% from last year at $8.58 billion, while services revenues rose 2% to $3.34 billion, Cisco said.
Alongside its earnings release, Cisco also said it has named R. Scott Herren as its new CFO following the retirement of Kelly Kramer, who had been in the post for the past nine years.