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Cisco has reported a year-over-year decline in revenue for four consecutive quarters.
AFP via Getty Images
Shares of Cisco Systems Inc. surged in the extended session Thursday after the maker of network services, video conferencing tools and quarterly earnings and security software outlook beat Wall Street estimates, and it has announced a new CFO.
Cisco CSCO,
reported first-quarter net income of $ 2.17 billion, or 51 cents per share, compared with $ 2.93 billion, or 68 cents per share, in the same period a year earlier. Adjusted earnings were 76 cents per share, up from 84 cents per share a year ago.
Revenue fell to $ 11.93 billion from $ 13.16 billion in the last year’s quarter, marking the fourth consecutive quarter. Cisco reported a decline in revenue year over year. Security sales helped fill the gap in infrastructure sales.
Analysts polled by FactSet had forecast earnings of 70 cents per share on revenue of $ 11.85 billion, following Cisco’s forecast of 69 cents to 71 cents per share on revenue of 11, $ 71 billion to $ 11.97 billion.
Stocks rose 8% after hours and will add around $ 13 billion in market cap if the stock performs at those levels when it opens on Friday. Shares fell 1.7% in the regular session to close at $ 38.67, for a market cap of $ 163.23 billion.
For the first quarter, infrastructure sales fell 16% to $ 6.34 billion and app sales fell 8% to $ 1.38 billion, but security sales increased 6% % to 861 million dollars compared to the same period of the previous year. Analysts had forecast infrastructure sales of $ 6.45 billion, application sales of $ 1.4 billion, and security sales of $ 855.8 million.
During the analyst call, Chuck Robbins, president and CEO of Cisco, appeared much more optimistic about the future than he did during the earnings call three months ago.
“When we did the last earnings call, we had seen good demand in the first two weeks of the quarter, but it was clear that it was a few weeks and so nothing would have given us a trend, but the quarter has started and it stayed, it was very linear, ”Robbins told analysts.
Cisco expects earnings of 74 cents to 76 cents per share on revenue of $ 11.36 billion to $ 12.01 billion for the second fiscal quarter. Analysts had forecast 73 cents per share on revenue of $ 11.6 billion for the quarter.
Cisco has also appointed R. Scott Herren as the new CFO effective December 18.
“More recently Scott was CFO of Autodesk ADSK,
and brings incredible software experience and has been instrumental in the successful transformation of Autodesk’s business model from perpetual licensing to SaaS and subscription software, ”Robbins said on the call.
In its latest earnings report, Cisco announced CFO Kelly Kramer will leave the company once a replacement is found and experience a billion dollar cost reduction “over the next few quarters. “.
Cisco reported $ 602 million in “restructuring and other charges” in the first quarter of the fiscal year, and said it expects an additional $ 298 million to be reported in the second quarter. Cisco did not comment on the call as to how many of its last 77,500 employees reported to have been affected by layoffs.
For the year, Cisco shares are down about 20%, compared to a 1.9% gain in the Dow Jones Industrial Average DJIA,
including Cisco, a 9% increase in the S&P 500 SPX index,
and a 30% gain by the highly technological Nasdaq Composite Index COMP,
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