Cisco (NASDAQ: $CSCO) recently received a great boost as the company’s quarterly earnings report came out. The report also revealed useful insight into spending in the enterprise tech sector.
Cisco’s earnings report showed $1.14 per share, which beat analysts’ estimates of $11.06 per share. The figure is higher than last year’s earnings of $0.83 per share, all adjusted for non-recurring items.
Cisco Consistently Beats Predictions
Cisco’s August 16, 2023 earnings report beat the analysts’ predictions by 7.55%. In the previous quarter, Cisco was predicted to post earnings of $0.97. The company reported earnings of $1, which was 3.09% better than expected. This trend extends to the last four quarters, during which the company has performed better than expected.
According to the earnings report, Cisco posted revenues of $15.2 billion, beating predictions by 1.04%. This was better than last year when the company posted revenues of $13.1 billion. Revenue predictions have equally been better than predicted in the past four quarters.
Product orders for Cisco fell 14%, according to the report. However, they rose 30% from the quarter ending April. Analysts had estimated the decline to be 15-20%. Analysts predict bigger order declines in the next quarter as the company normalizes its backlog at the end of Q1 2024.
Cisco Revenue Outlook
For fiscal year 2024, Cisco projections point to sales of $57.6 billion at the midpoint, a rise of around 1% year-over-year. This is lower than analysts’ predictions of $58.38 billion, representing 2.78% growth in sales. The company’s fiscal year 2024 will begin with the September quarter.
The outlook predicts earnings ranging from $4.01 to $4.08 per share, within the analysts’ estimate of $4.05 per share. That is 6% higher than the 2023 fiscal year.
Cisco expects capital spending by cloud computing and telecoms to slow down in 2023. However, corporate and governance spending will keep rising. The report also revealed the company was shifting from its core business of selling routers and network switches. Through acquisitions, the company aims to increase revenue for software and services.
According to the earnings report, acquisitions in Q4 2023 were Lightspin Technologies Ltd, a software security firm; Smartlook, s.r.o., which provides a digital experience and product analytics solution; and Armorblox, Inc., a company working on Large Language Models and natural language in cyber security.
The company’s next earnings report for fiscal Q1 2024 is expected to come out on November 15, 2023.
What the Future Holds for Cisco
Cisco has underperformed the market for 2023. For investors, the question is what the future holds for the stock. While there is no easy answer, the earnings outlook is a reliable measure to help investors. This will include looking at earnings predictions by analysts, and how those predictions change over time.
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