On January 17, 2024, Cisco CEO Chuck Robbins was interviewed by Bloomberg at the World Economic Forum in Davos, Switzerland.
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Cisco Although sales were down from a year earlier, fiscal third-quarter profit and revenue still beat Wall Street expectations. The stock rose 8% in after-hours trading.
Here’s how the company compares to the LSEG consensus:
- Earnings per share: Adjusted 88 cents, expected 82 cents
- income: US$12.7 billion, expected US$12.53 billion
Cisco’s revenue fell about 13% year-on-year in the quarter ended April 27, according to a statement. This is the largest decline since 2009.
The statement said the weakness stemmed from customers installing equipment they had received in recent quarters. Cisco made similar comments in its last earnings report three months ago.
“We currently expect customers to have the majority of their inventory installed by the end of the fiscal year in July,” Cisco Chief Executive Chuck Robbins said on a conference call with analysts.
Cisco’s public sector business performed weaker in the U.S. than elsewhere.
We believe this issue has been resolved with the recent funding agreement signed by the US federal government.
Online revenue was $6.52 billion, down 27%. This category, which includes data center switches, still accounts for the majority of total revenue.
This season, Cisco fully Acquired security software maker Splunk for $28 billion. The deal lowered Cisco’s adjusted earnings by 1 cent per share but generated $413 million in additional revenue.
“As a result of the transaction, we have identified 5,000 existing Cisco customers who have the potential to become meaningful Splunk customers, and our sales team is already making those connections,” Robbins said. Cisco Finance Chief Scott Herren said that over time, Cisco will be able to reduce costs.
Cisco raised fiscal 2024 revenue guidance to $53.6 billion to $53.8 billion from $51.5 billion to $52.5 billion February. Analysts polled by London Stock Exchange Group (LSEG) had expected $53.14 billion.
The company narrowed its full-year adjusted profit forecast. Prices currently range from $3.69 to $3.71, compared with $3.68 to $3.74 in February. The LSE consensus was $3.67.
Prior to Wednesday’s announcement, 2024 shares were down 2%, while the S&P 500 was up 11%.
Cisco said former Splunk CEO Gary Steele will become the parent company’s public president, effective immediately. Jeff Sharritts, Cisco’s chief account and partner officer, will leave the company.
This is breaking news. Please check back for updates.
WATCH: Cisco CEO Chuck Robbins: $28 billion Splunk deal will be important financial growth driver
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