Categories Earnings, Technology
Cisco Systems (NASDAQ: CSCO) Q1 profit beats estimates but guides Q2 below view
Cisco Systems Inc. (NASDAQ: CSCO) reported an 18% drop in earnings for the first quarter of 2020 due to higher costs and expenses. Despite the results exceeding analysts’ expectations, the company guided second-quarter earnings below the consensus estimates.
Net income plunged by 18% to $2.9 billion or $0.68 per share. Adjusted earnings increased by 12% to $0.84 per share. This is much better than the analysts’ expectations of $0.81 per share.
Revenue rose by 2% to $13.16 billion, which topped the consensus estimates of $13.09 billion. Product revenue rose by 1% and service revenue increased by 4%.
Looking ahead into the second quarter, the company expects revenue to decline in the range of 3% to 5% year-over-year, and earnings in the range of $0.61 to $0.67 per share. Adjusted earnings are anticipated to be in the range of $0.75 to $0.77 per share. Analysts expect earnings of $0.79 per share on revenue growth of 3% for the second quarter.
The cloud, Internet of Things (IoT), and security remained the high-growth businesses and Cisco has been investing in these heavily. The strategic deals, including acquisitions, turned out to be the breadwinner of its Applications and Security divisions.
For the first quarter, by geographic segment, revenues in the Americas and EMEA each was up by 4% while that in APJC declined by 8%. Product revenue was led by a 22% growth in Security and a 6% rise in Applications. However, Infrastructure Platforms were down 1%.
The company completed several acquisitions in the first quarter of fiscal 2020. In addition, in the fourth quarter of fiscal 2019, Cisco announced its intent to buy Acacia Communications, a publicly-traded fabless semiconductor company. The acquisition is expected to close during the second half of fiscal 2020.
Cisco has been transforming its business model from a hardware company to a networking service provider with the primary focus remained on software as a subscription. This is likely to increase customer monetization and recurring revenues. The transformation is expected to yield better returns in the future.
Most Popular
Costco (COST) reports strong growth in Q1 FY26 earnings; revenue up 8%
Costco Wholesale Corporation (NASDAQ: COST) has reported an increase in net income for the first quarter of fiscal 2026. Revenues grew 8.3% year-over-year. The Issaquah, Washington-headquartered warehouse giant’s total revenues
AVGO Earnings: Broadcom reports higher Q4 FY25 revenue, profit; results beat
Semiconductor company Broadcom, Inc. (NASDAQ: AVGO) on Thursday reported an increase in revenue and adjusted earnings for the fourth quarter of fiscal 2025. The numbers also surpassed analysts' expectations. Adjusted
Lamb Weston (LW) is set to report Q2 2026 earnings next week, here’s what to look for
Shares of Lamb Weston Holdings, Inc. (NYSE: LW) rose over 1% on Thursday. The stock has gained 4% over the past three months. The French fry giant is slated to
Comments
Comments are closed.