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Cisco beats Q4 estimates and issues strong forecast, shares fall in extended trading
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Cisco Systems reported fiscal fourth-quarter earnings that topped analyst estimates, with adjusted earnings per share of $1.22 versus $1.17 expected and revenue of $17.25 billion versus $16.82 billion expected. The company also issued a strong revenue forecast for the current quarter of $18 billion to $18.2 billion, well above the $16.8 billion average estimate. Despite the better-than-expected results, Cisco's stock dropped in extended trading on Wednesday. The decline came after Wall Street had pushed the stock up more than 60% this quarter on optimism about Cisco's role in the AI boom. The company reported that hyperscalers placed $4 billion in infrastructure orders in the quarter, totaling $9.3 billion for the fiscal year. Cisco expects revenue from hyperscalers to nearly double in fiscal 2027 to $7.5 billion. Overall revenue climbed 18% year-over-year to $17.25 billion, while net income surged 51% to $3.9 billion.
Source report
Cisco Chairman and CEO Chuck Robbins speaks at a keynote address at the Cisco Live! conference in Las Vegas on June 7, 2023. Ethan Miller | Getty Images Entertainment | Getty Images
Cisco shares dropped in extended trading on Wednesday, despite reporting better-than-expected earnings and issuing a revenue forecast that surpassed analyst estimates.
Key Financial Results vs. LSEG Estimates
- Earnings per share: $1.22 adjusted vs. $1.17 expected
- Revenue: $17.25 billion vs. $16.82 billion expected
Revenue and Guidance
Entering the fiscal fourth-quarter report, Wall Street had turned bullish on Cisco, pushing the stock up more than 60% this quarter and about 8% this month. Optimism centered on the networking company's potential to play a larger role in the artificial intelligence boom.
Cisco's results suggest that is happening, even though the stock traded lower on the report. The company forecast revenue for the current quarter of $18 billion to $18.2 billion, well above the $16.8 billion average estimate, according to LSEG.
Cisco also issued an earnings forecast for the current period that exceeded expectations, along with strong guidance for the full fiscal year.
Hyperscaler and Infrastructure Orders
Hyperscalers — the internet giants driving much of the AI spending — placed $4 billion in infrastructure orders during the quarter, bringing the total for the fiscal year to $9.3 billion, Cisco said. That group accounted for approximately $4 billion in revenue over the past fiscal year. Cisco expects that figure to nearly double in fiscal 2027 to $7.5 billion.
Year-Over-Year Growth
- Revenue: Climbed 18% to $17.25 billion, from $14.7 billion a year earlier.
- Net income: Increased 51% to $3.9 billion (97 cents per share), from $2.6 billion (64 cents per share) a year ago.
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Cisco Stock Falls 7% on Margin Concerns Despite Strong AI-Driven Earnings Beat