Networks kit maker Cisco Systems beat quarterly forecasts again as it reported first quarter 2021 earnings overnight.
The Nasdaq-listed stock posted $0.76 earnings per share (EPS) on $11.93 billion (approximately £9.1 billion) in the quarter to 24 October, sending its stock soaring more than 7% in after-hours trading to an implied $38.67.
Net income came in at $3.2 billion.
More people working from home during Covid lockdowns drove demand for its teleconferencing tools, networking equipment and cybersecurity products.
Analysts were expecting EPS of $0.70 on revenue of $11.85 billion.
EXECUTION IN CHALLENGING MARKET
‘Our Q1 results reflect good execution with strong margins in a challenging environment’, said Cisco’s chief finance officer Kelly Kramer.
‘We continued to transform our business through more software offerings and subscriptions, driving 10% year over year growth in remaining performance obligations. We delivered strong growth in operating cash flow and returned $2.3 billion to shareholders.’
In a separate announcement, Cisco revealed that Kramer will retire as CFO in December. Her replacement is Scott Herren, who most recently served as the chief finance officer for Autodesk.
But the company’s figures fell sharply on the previous quarter, although investors had anticipated as much and homed in instead on upbeat guidance on Q2 that also steers the market to expect more than is currently estimated.
FIRMER GUIDANCE
Cisco said it sees $0.74 to $0.76 in adjusted EPS on flat to modest (2%) revenue declines in the fiscal second quarter. Analysts polled by Refinitiv had expected $0.73 adjusted EPS on $11.63 billion in revenue, which implies a 3% revenue decline for the period.
| Non-GAAP Results |
| Q1 FY 2021 | Q1 FY 2020 | Vs Q1 FY 2020 | |
| Revenue | $11.9bn | $13.2bn | -9% |
| Net Income | $3.2bn | $3.6bn | -11% |
| EPS | $0.76 | $0.84 | -10% |
‘Cisco is off to a solid start in fiscal 2021 and we are encouraged by the signs of improvement in our business as we continue to navigate the pandemic and other macro uncertainties’, said Chuck Robbins, chairman and chief executive of Cisco.
‘Our focus is on winning with a differentiated innovative portfolio, long-term growth and being a trusted technology partner offering choice and flexibility to our customers’, he said. ‘We see many great opportunities ahead as every company in every industry is accelerating its digital-first strategy.’
