Cisco’s Chuck Robbins (Chuck Robbins) CEO delivered a speech at the VivaTech (Viva Technology) trade fair held in Paris on May 24, 2018.
Gerald Julian | AFP | Getty Images
Cisco’s stock price rose as much as 9% in after-hours trading on Thursday, after the company announced its first-quarter financial report and its optimistic expectations exceeded analysts̵
The company’s approach is as follows:
- income: According to data from Refinitiv, adjusted earnings per share were 76 cents, while analysts expected earnings per share of 70 cents.
- income: According to Refinitiv’s data, it was 11.93 billion U.S. dollars, while analysts expected 11.85 billion U.S. dollars.
Regarding guidance, Cisco said it expects adjusted earnings per share for the second fiscal quarter to be 74 cents to 76 cents, and revenue fell 2% to flat. Analysts surveyed by Refinitiv expect on average its adjusted earnings per share of 73 cents and revenue of $11.63 billion, which means that revenue for the quarter fell by 3%.
Overall, according to a statement, Cisco’s revenue this quarter fell 9% on an annualized rate, consistent with the 9% decline in the previous quarter. Revenue has now fallen for four consecutive quarters. The coronavirus pandemic and recession continue to challenge Cisco because most of Cisco’s revenue still comes from equipment sales in corporate and government data centers and offices, and as people work from home, spending on cloud services has increased.
Cisco’s infrastructure platform segment, including data center network switches, achieved revenues of US$6.34 billion, a 16% year-on-year decrease, which was lower than the average expected US$6.45 billion of analysts surveyed by FactSet. In terms of revenue, it is the largest part of Cisco’s business and the part most affected by the virus.
The application business including Webex video call services and AppDynamics monitoring software contributed $1.38 billion in revenue, a decrease of 8%, slightly below the FactSet consensus of $1.4 billion.
Cisco said that in the past six years, Autodesk’s chief financial officer Scott Herren will replace Cisco’s chief financial officer Kelly Kramer, who announced his retirement in August.
Cisco announced a goal this quarter to increase the representation of blacks in senior management by 75% by 2023. During the quarter, Cisco also acquired BabbleLabs, a company with software that can improve call quality, and announced enhancements to Webex software.
As of Thursday’s close, Cisco’s stock price has fallen about 20% so far this year, while the S&P 500 has risen 9% over the same period.
Executives will discuss the results with analysts on a conference call starting at 4:30 pm Eastern time.
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Look: Organizational Resilience-Cisco’s Chuck Robbins (Chuck Robbins) and Francine Katsoudas (Francine Katsoudas) at CNBC @Work Summit