Cisco Systems (CSCO) on Wednesday reported fiscal first-quarter earnings and revenue that topped consensus estimates. Shares of CSCO rose as the computer networking giant also announced a restructuring plan and gave an earnings forecast that beat consensus.
Cisco’s earnings for the quarter ended Oct. 29 rose 5 percent year over year to 86 cents a share, beating Wall Street’s target. The company reported revenue rose 6% to $13.6 billion.
Analysts polled by FactSet estimated Cisco’s profit of 84 cents per share on revenue of $13.31 billion.
For the current quarter to the end of January, Cisco said it expects earnings of 85 cents per share, in line with estimates. Cisco forecast revenue growth of 5.5% in the middle of its guidance, above forecasts for sales growth of 4%.
CSCO Shares: Restructuring Plan Announced
Cisco also announced a restructuring plan. The company said it would recognize pretax charges of about $600 million, consisting of severance and other one-time termination benefits, real estate-related charges and other expenses. Cisco expects to recognize about $300 million of the charges in the fiscal second quarter.
“We delivered strong results in the first quarter and continued to make progress in our business transformation,” Chief Financial Officer Scott Herren said in the earnings release. “Our annual recurring revenue increased to more than $23 billion, with product ARR growing 12%.”
Cisco shares rose nearly 4% to 46.15 in extended trading on the stock market today.
Heading into Cisco’s earnings report, the company has a relative strength rating of 42 out of a possible 99, according to IBD Stock Check. CSCO shares are down 30% in 2022.
Also, CSCO’s stock has drifted away from its core business of selling network switches and routers. With acquisitions, Cisco seeks to increase revenue from software and services.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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