Cisco Systems Inc (Nasdaq: CSCO) reported better-than-anticipated fiscal 2022 second-quarter earnings and revenues. Additionally, the company also issued an upwardly revised FY 2022 outlook as it witnesses robust orders from cloud computing firms. Following the results, the stock of Cisco ended Thursday’s trading at $55.77, up $1.52 or 2.80% from the prior close.
The San Jose, California-based company, reported second-quarter revenues of $12.72 billion, an increase of 6.40% from $11.96 billion in the similar period last year.
For the quarter ended January 29, 2022, Cisco posted earnings of $2.97 billion, or $0.71 per share, up from $2.54 billion, or $0.60 per share, in the quarter ended January 23, 2021.
Excluding share-based compensation expense, amortization of acquisition-related intangible assets, and acquisition-related/divestiture costs, among others, the Q2 2022 non-GAAP net income was $3.548 billion, or $0.84 per share, compared with $3.363 billion, or $0.79 a share in Q2 2021.
Analysts polled by Refinitiv had anticipated the company to report earnings of $0.81 per share on revenues of $12.65 billion for the reported period.
Segment-wise,
- Secure, Agile Networks revenues increased 7% y-o-y to $5.898 billion.
- Hybrid Work revenues were $1.067 billion, a decrease of 9% from last year.
- End-to-End Security revenues rose by 7% to $883 million.
- Internet for the Future revenues surged 42% y-o-y to $1.322 billion.
- Optimized Application Experiences revenues were $180 million, an increase of 12% from the prior-year period.
- Services revenues were $3.367 billion, down 1% on a y-o-y basis.
The company’s deferred revenue stood at $22.313 billion at the end of January 29, 2022, an increase from $20.846 billion at the end of January 23, 2021. The deferred revenue includes product revenue of $9.767 billion and service revenue of $12.546 billion.
Furthermore, Cisco’s management has declared a quarterly dividend of $0.38 per share, payable on April 27, 2022. The dividend reflects an increase of 3% or $0.01 from the earlier quarter’s dividend.
Also, the company’s board has approved a new share repurchase program for $15 billion. Including the latest approval, the total value of the share repurchases program stands at $18 billion.
Looking ahead, Cisco anticipates adjusted earnings of between $0.85 and $0.87 per share in 3Q 2022. The revenue growth is anticipated to be in the range of 3% to 5%. Wall Street analysts currently anticipate earnings of $0.86 per share for the quarter.
For FY 2022, the company forecasts adjusted earnings in the range of $3.41 to $3.46 per share. Also, revenue growth is anticipated to be between 5.50% and 6.50%. Currently, analysts anticipate earnings of $3.68 per share on revenue growth of 5.20%.
Earlier, Cisco had forecast adjusted earnings of between $3.38 and $3.45 per share. Revenue growth was anticipated in the range of 5% to 7%.
The quarterly earnings beat and upward revision of FY 2022 estimates are anticipated to keep the stock of Cisco bullish in the short term.
Technically, the stock of Cisco is rising after testing the support at 52.50. The next resistance is anticipated only near 62. Additionally, the stock is trading above its 50-day moving average, while the stochastics indicator is near the oversold region. Therefore, we are anticipating the stock to remain in an uptrend in the short term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
