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Cisco shares increase as earnings and earnings forecasts at the top of Street estimates among rates



Shares of Cisco Systems Inc. rose on Wednesday, after the network company released quarterly earnings exceeding Wall Street estimates and forecast business for the end of its fiscal year exceeding analysts' consensus on rising tariffs in China.

whitefish

CSCO, + 0.81%

shares rose 3% after hours. For the fourth quarter, Cisco expects adjusted earnings of 80 to 82 cents per share, as well as revenue growth of 4.5% to 6.5%, or 13.21%. billions of dollars to 13.46 billion dollars. Forecasts exclude software solutions business for video service providers, which earned $ 206 million in the fourth quarter of 2018. Analysts were forecasting an estimated profit of 81 cents per share on a turnover of 13, $ 29 billion.

Cisco President and Chief Executive Officer Chuck Robbins said in the earnings conference that the price hike from 10% to 25% has already been taken into account in the outlook. This week, China said it imposed tariffs of up to 25 percent on US products, citing the 25 percent that President Donald Trump imposed on $ 200 billion worth of Chinese goods.

Robbins said that Cisco had contacted the Trump administration to ensure that she understood the impact of rates, as she continued to optimize her channel. supply and that it would make price adjustments where necessary.

"Last week, when we saw the indication that rates were going to rise to 25% on Friday morning, the teams mobilized and we totally executed everything we needed to do to manage the rates," Robbins said. to analysts. on the call.

Late Wednesday, Cisco announced third-quarter net profit of $ 3.04 billion, or 69 cents a share, compared with $ 2.69 billion, or 56 cents a share, in the same quarter of the previous year . Adjusted earnings were 78 cents per share. Analysts surveyed by FactSet were expecting earnings per share of 77 cents, while Cisco expected earnings between 76 and 78 cents per share.

Revenues reached $ 12.96 billion, compared to $ 12.46 billion in the same quarter of the previous year. Revenue from products reached $ 9.72 billion, up from $ 9.3 billion a year ago, and services from $ 3.24 billion versus $ 3.16 billion last year. Analysts were expecting a turnover of 12.89 billion dollars, while Cisco expected revenues of 12.96 to 13.21 billion dollars. Wall Street had a product of $ 9.65 billion and a service product of $ 3.22 billion.

In the third quarter, Cisco told shareholders its return to $ 7.5 billion through share buybacks and dividends: $ 1.5 billion in dividends and $ 6 billion in redemptions of approximately $ 116 million. shares at an average price of $ 52.14 per share. Cisco said that it still had $ 18 billion of redemption authority.

Cisco shares closed Wednesday up 0.8% to $ 52.44, while the Dow Jones Industrial Average index

DJIA, + 0.45%

earned 0.5%, the S & P 500 index

SPX, + 0.58%

increased by 0.6% and the Nasdaq Composite Index, which is very technology driven,

COMP + 1.13%

advanced by 1.1%.

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