Cisco Systems Inc. (CSCO) - Get Cisco Systems, Inc. Report shares surged more than 7% on Thursday, Nov. 16, after the networking giant posted stronger-than-expected earnings in its first fiscal first quarter and said revenue will likely snap a long streak of declines as customers spend more on products such as security solutions.
Cisco shares traded at $36.57 early Thursday, the highest since February 2001. Shares have risen 20.8% so far in 2017.
Cisco posted earnings of 61 cents per share for the three months ending in September, topping forecasts of 60 cents a share on revenues of $12.1 billion. The San Jose, Calif-based group said it expects fiscal second-quarter revenue to grow 1% to 3%, with non-GAAP earnings of 58 to 60 cents per share.
"Our results in Q1 demonstrate the continued progress we're making on our strategy," said CEO Chuck Robbins. "The network has never been more critical to business success. Cisco is delivering more insights and intelligence as we help our customers build highly secure, intelligent platforms for digital business."
He also told investors that software and recurring revenue growth continues and touted partnerships with large customers such as Alphabet's (GOOGL) - Get Alphabet Inc. Class A Report Google, Microsoft (MSFT) - Get Microsoft Corporation Report and Alibaba (BABA) - Get Alibaba Group Holding Ltd. Report that are developing hybrid cloud architecture.
Cisco said revenues in its first quarter were led by its 'Security' sales, which rose 8%, and that it closed its purchased of privately-held network forensics security applications provider Observable Networks Inc.
"Security is fundamental to everything we do," Robbins said,
Cyber-security threats have increased significantly this year, with multiple firms targeted by various virus and randomware attacks that have clipped quarterly earnings and revealed notable lapses in corporate system defences.
Equifax Inc. (EFX) - Get Equifax Inc. Report said last week that the cyber attack it suffered earlier this year pushed its operating expenses to a record high $682 million and led to at least 240 class-action lawsuits and 60 government and regulatory inquiries.
The hack, which the company revealed in September, took place last spring of this year and exposed the details of more than 145 million of the credit data provider's customer base.
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