Shares of Cisco rose initially after-hours before falling Wednesday after the company reported better-than-expected revenue and earnings.
The stock was down 0.86% to $49.50 a share in after-hours trading, after having risen 1.6 % in regular trading hours.
The revenue beat was largely driven by Cisco’s subscription services business, which its chief financial officer was quick to emphasize in the company’s press release.
“We executed well this quarter by delivering strong margins and EPS growth while driving more software and subscriptions,” said CFO Kelly Kramer.
Adjusted earnings per share for the January quarter came in at 77 cents, beating analysts estimates of 76 cents and rising 5% year-over-year. Revenue was $12 billion, beating Wall Street estimates of $11.97 billion and falling 4%.
Infrastructure platforms revenue was $6.53 billion, missing estimates of $6.58 billion. Applications revenue was $1.34 billion, missing estimates of $1.43 billion. Security revenue was $748 million, beating expectations of $742 million. And service revenue was $3.334 billion, beating estimates of $3.186 billion.
Cisco also increased its quarterly dividend by 1 cent, or 3%.“Our increased dividend shows confidence in the strength of our ongoing cash flows and demonstrates our commitment to shareholder return,” said Kelly in the press release.
Cisco is guiding for current quarter revenue to decline between 1.5% and 3.5%. Gross margin is expected at between 64.5% and 65.5%, versus analysts expectations of 64.6%. Management is guiding for EPS of 80 cents at the midpoint, in line with analysts expectations.
The stock was up 3% for the year heading into the earnings print.