Cisco Systems Inc (Nasdaq: CSCO) reported better-than-anticipated fiscal 2023 second-quarter results. While issuing upbeat 3Q 2023 guidance, the company also upwardly revised its FY 2023 earnings per share outlook. The stock of Cisco closed Thursday’s trading session at $50.99, up $2.54 or 5.24% from its prior close.
San Jose, California-based Cisco reported second-quarter revenues of $13.59 billion, an increase of 7.10% from $12.72 billion in the prior-year period. The reported figure reflects the second-highest quarterly revenue in Cisco’s history.
For the latest quarter, the networking solution provider posted a net income of $2.77 billion, or $0.67 per share. In the second quarter of fiscal 2022, Cisco recorded a net income of $2.97 billion, or $0.71 per share.
Excluding charges, Cisco reported a 2Q 2023 non-GAAP net income of $3.639 billion, or $0.88 per share, an increase of 3% from $3.55 billion, or $0.84 per share, in 2Q 2022.
Analysts surveyed by Refinitiv had anticipated the company to report earnings of $0.86 per share on revenues of $13.43 billion.
Commenting on the second quarter results, Cisco CEO, Chuck Robbins, said “We have reshaped and transformed the company and our portfolio while remaining highly disciplined both financially and operationally.”
Product wise:
- Secure, Agile Networks revenues grew by 14% to $6.75 billion.
- Internet for the Future revenues was $1.306, a decline of 1% from last year.
- Collaboration revenues fell by 10% y-o-y to $958 million.
- End-to-End Security revenues were $943 million, up 7% on a y-o-y basis.
- Optimized Application Experiences revenues surged 11% y-o-y to $199 million.
- Other Products revenues were $3 million, an increase of 25% from the previous year.
- Services revenues inched up 2% to $3.437 billion.
Notably, 44% of the second quarter revenue was generated from subscriptions, which mostly include software solutions.
Looking forward, the company anticipates 3Q 2023 earnings in the range of $0.96 to $0.98 per share. Also, Cisco expects revenue growth of 11% to 13%. Wall Street analysts anticipate the company to post adjusted earnings of $0.89 per share on revenues of $13.58 billion (which translates to 6% growth).
Cisco now projects FY 2023 earnings in the range of between $3.73 and $3.78 per share, an increase from the previous guidance range of $3.51 to $3.58 per share. Revenue growth is anticipated in the range of 9% to 10.50%.
The company also announced a quarterly dividend of $0.39 per share, reflecting an increase of 3%.
The earnings beat and upward revision of the FY 2023 earnings outlook are expected to keep the share price of Cisco slightly bullish in the short term.
The historical price chart indicates that the stock of Cisco is ascending after testing the support level of 46.5. The next major resistance is anticipated only near 58. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate the stock price of Cisco to remain in an uptrend in the days ahead.
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