Cisco Slips as Forecast Overshadows Beats on Quarterly Earnings, Sales

Date : 05/16/2018 @ 5:24PM
Source : Dow Jones News
Stock : Cisco Systems, Inc. (MM) (CSCO)
Quote : 42.01  -0.39 (-0.92%) @ 7:44PM

Cisco Slips as Forecast Overshadows Beats on Quarterly Earnings, Sales

Cisco Systems, Inc. (MM) (NASDAQ:CSCO)
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3 Months : From Apr 2018 to Jul 2018

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   By Maria Armental 
 

Cisco Systems Inc. (CSCO) showed sustained growth in the latest period, largely beating internal and Wall Street expectations, but its forecast for the current quarter lacked some luster.

Cisco shares, which have outperformed the market with an 18% gain this year, fell 4.3% to $43.22 in after-hours trading.

The Silicon Valley tech giant, a prolific acquirer that like others have taken advantage of the U.S. tax overhaul to bring back money from overseas, has signaled that dealmaking would remain a critical part of its strategy even as most of that cash has been earmarked to buy back stock and raise dividend payouts.

In its latest quarter, Cisco completed its acquisition of BroadSoft and Syport Systems. This month it closed its acquisition of artificial-intelligence startup Accompany and announced a deal to sell a large part of its video-software business, formerly known as NDS Group, to private-equity firm Permira.

Cisco is also starting a venture fund that would be focused on early stage investments and partially modeled after Google parent Alphabet Inc.'s GV, The Wall Street Journal reported.

The networking-gear maker reported third-quarter profit rose 7% to $2.69 billion, or 56 cents a share. Excluding stock-based compensation and other items, profit rose to 66 cents a share from 60 cents a share a year earlier.

Revenue rose 4.4% to $12.46 billion, with recurring revenue accounting for 32% of total revenue.

Cisco had forecast 50 cents to 55 cents a share in profit, or 64 cents to 66 cents as adjusted, with revenue increasing 3% to 5%. Analysts surveyed by Thomson Reuters projected 55 cents a share, or 65 cents on an adjusted basis, and a 4% revenue increase.

The company's profit margin narrowed to 62.3% from 63% a year earlier.

For the current quarter, Cisco projects per-share profit of 55 cents to 60 cents, or 68 cents to 70 cents as adjusted, and revenue increasing 4% to 6%. Analysts expect earnings of 59 cents a share, or 69 cents a share on an adjusted basis, on a 4.9% revenue increase.

 

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

May 16, 2018 17:09 ET (21:09 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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