Cisco Systems Inc.’s stock rose 5% in extended trading Wednesday after the computer-networking company reported fiscal second-quarter results slightly above Wall Street estimates and offered encouraging guidance despite lingering investor concern over supply-chain issues.
The company also announced a $15 billion stock repurchase, but did not mention a rumored $20 billion acquisition of Splunk Inc.
reported net income of $2.97 billion, or 71 cents a share, compared with net income of $2.5 billion, or 60 cents a share, in the year-ago quarter. The company’s adjusted net income was $3.5 billion, or 84 cents a share, vs. $3.4 billion, or, 79 cents a share, a year ago.
Revenue improved 6% to $12.7 billion, from $12 billion a year ago. Analysts surveyed by FactSet had expected earnings of 81 cents a share and revenue of $12.66 billion.
“We continue to see incredibly strong demand across our portfolio, emphasizing the criticality and relevance of Cisco’s innovation,” Cisco Chief Executive Chuck Robbins said in a statement announcing the results. “Our robust order strength, record backlog and double-digit growth in annual recurring revenue position us well to deliver growth.”
The company expects 70 cents to 74 cents a share in profit, or 85 cents to 87 cents on an adjusted basis, in the fiscal third quarter. Analysts were forecasting 78 cents and 87 cents, respectively, according to FactSet.
Cisco reported sales of $9.35 billion for products and $3.37 billion for services during the quarter. Secure, Agile sales ($5.9 billion, up 7% year-over-year) and Internet for the Future ($1.32 billion, up 42%) led in revenue categories.
Cisco, like most major tech component suppliers, is coping with supply-chain issues that have partially offset strong enterprise sales. “Our business performed well with revenue and non-GAAP EPS growing 6% year over year despite the supply-constrained environment,” Cisco Chief Financial Officer Scott Herren said in a statement.
Cisco’s stock is down 14% so far in 2022, while the Dow Jones Industrial Average
which counts Cisco as a component, has declined 4%. The broader S&P 500 index
has dropped 6% this year.