Cisco Systems Inc (NASDAQ: CSCO) topped profit expectations with its quarterly results but slashed its fiscal year earnings outlook on the account of its consumers being busy implementing the offerings they received over the previous quarters. The weak guidance overshadowed quarterly results, with shares of the networking giant falling as much as 13% upon Wednesday’s report.
Fiscal First Quarter Highlights
For the quarter ended on October 28th, revenue rose 7.6% YoY to $14.67 billion.
Networking hardware maker earned a net income of $3.64 billion, or 89 cents per share, up from last year’s comparable quarter when it made $2.67 billion, or 65 cents per share. After strong delivery figures over the previous three quarters, new product orders slowed down with consumers being busy installing and implementing the products they received. Cisco projected that one or two quarters of shipped products are waiting to be implemented.
During the reported quarter, Cisco announced it intends to acquire Splunk, a data analytics software maker, for $28 billion. It also reported it partnered with Nvidia Corporation (NASDAQ: NVDA) to unleash the power of hybrid workplaces. More precisely, it unveiled the next milestone of its ongoing work with Nvidia that aims to deliver AI-powered meetings to hybrid workers. Cisco announced the launch of Room Kit EQX and the expansion of its Cinematic Meetings capabilities which are both powered by an AI engine that Nvidia developed. Together with Nvidia, Cisco is pioneering the use of AI to enhance workplace collaboration. With Nvidia, Cisco is reimagining its device portfolio to offer solutions for any cost point.
For the fiscal second quarter, Cisco guided for adjusted earnings of 82 cents to 84 cents per share with revenue in the range between $12.6 billion and $12.8 billion which translates to a 6.6% revenue decline. These projections were below LSEG’s estimates for EPS and revenue that are 99 cents and $14.19 billion, respectively.
Cisco also lowered its full-year guidance for revenue but lifted its earnings outlook. It guided for EPS in the range between $3.87 and $3.93 with a revenue range between $53.8 billion and $55.0 billion.
As for the 2025 fiscal year, Cisco is confident of gaining $1 billion worth of AI infrastructure orders from cloud providers. But with its latest report that even had better-than-expected results, Cisco threw a monkey wrench into the ongoing tech rebound story with its weak guidance that shows its consumers already have the networking gear they need.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
This article Cisco’s Fallout Outlook Overshadowed Its Quarterly Results originally appeared on Benzinga.com
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.