Another impressive performance by its key business segments pushed up Cisco’s (CSCO) revenues in the first quarter, defying the challenges posed by the US-China trade standoff. Earnings increased and topped estimates, sending the company’s stock higher in Wednesday’s extended trading hours.
At $0.75 per share, adjusted earnings were 23% higher compared to the first quarter of 2018 and above the Wall Street estimates. Reported earnings rose to $3.5 billion or $0.77 per share from $2.4 billion or $0.48 per share a year earlier.
Revenues of the San Jose, California-based network gear maker moved up 8% annually to $13.07 billion during the three-month period, far exceeding estimates. Deferred revenue, meanwhile, dropped 9% to $16.8 billion.
Infrastructure Platforms, the largest business segment that includes data center and networking switches, registered a 9% revenue growth. Revenues of the Applications and Security divisions grew 18% and 11% respectively. Growth was broad-based across all geographical regions and customer segments.
Infrastructure Platforms, the largest business segment that includes data center and networking switches, registered a 9% revenue growth
“We executed well, with broad-based growth across all of our geographies, product categories and customer segments, and delivered 8% revenue growth and 23% non-GAAP EPS growth. We are seeing the returns on our investments in innovation as we continue to transform our business model,” said CFO Kelly Kramer.
Buoyed by the upbeat first-quarter results, the management currently forecasts a 5-7% revenue growth for the second quarter, when adjusted earnings are expected to come in the range of $0.71 per share to $0.73 per share, which is broadly in line with analysts’ prediction.
Unadjusted earnings are expected to be between $0.56 per share and $0.61 per share. The company said the outlook excludes the SPVSS business that was divested recently. The January quarter typically witnesses softer sales due to the lull that follows the December holidays. During the October quarter, Cisco closed the acquisition of technology companies Duo Security and July Systems, Inc.
Cisco shares reached a 17-year high last month and gained about 22% over the past twelve months. The stock traded lower during Wednesday’s regular session but recovered in the after-hours following the earnings announcement.