Cisco Systems Inc.’s stock dipped 2% in extended trading Wednesday after the computer-networking company reported fiscal fourth-quarter results slightly above Wall Street estimates.
The company CSCO, 1.74% reported net income of $3 billion, or 71 cents a share, compared with net income of $2.6 billion, or 62 cents a share, in the year-ago quarter. The company’s adjusted net income was $3.6 million, or 84 cents a share.
Revenue rose 8% to $13.1 billion, from $12.15 billion a year ago.
“We continue to see great momentum in our business as customers are looking to modernize their organizations for agility and resiliency,” Cisco Chief Executive Chuck Robbins said in a statement announcing the results. He said product order growth of 31% was the best year-over-year in more than a decade.
Quarterly product sales ($9.72 billion) and service revenue ($3.4 billion) recorded year-over-year gains while Cisco reported minimal restructuring costs, allaying the concerns of some investors and employees.
In a conference call with analysts following the results, Cisco Chief Financial Officer Scott Herren characterized the quarter as very strong despite a pandemic and supply chain constraints that could linger the next several months.
“A super strong quarter: Every geo, product set, customer size. And $4 billion in software revenue the last 90 days,” Herren told MarketWatch. “We’re at the start of a multi-year trend of businesses trying to figure out how to be more agile and responsive to a hybrid work environment.”
Analysts surveyed by FactSet had expected earnings of 83 cents and revenue of $13 billion.
As is usually the case with fourth-quarter results, murmurs of layoffs picked up in recent days, part of what one former Cisco employee sardonically referred to as the company’s “summer tradition” of staff cutbacks after heavy M&A activity and the end of the fiscal year.
In the same quarter a year ago, for example, Cisco announced CFO Kelly Kramer was retiring and said it would undergo a $1 billion cost reduction “over the next few quarters” by “rebalancing its R&D investments” on several areas that included cloud security and automation in the enterprise.
But that didn’t happen this quarter, as Cisco — a bellwether for IT demand in the enterprise market — reported nearly $50 billion in fiscal-year revenue and offered first-quarter revenue growth guidance of between 7.5% and 9.5% — ahead of analysts’ projections of 7.5%.
The company expects 61 cents to 66 cents a share in Q1 profit, or 79 cents to 81 cents on an adjusted basis. Analysts are forecasting 67 cents and 81 cents, respectively.
For fiscal 2022, Cisco is modeling revenue growth of between 5% and 7%, and EPS of between $2.72 and $2.84, or between $3.38 and $3.45 on an adjusted basis.
Cisco’s stock is up 23% so far in 2021. The broader S&P 500 index SPX, 0.02% has gained 17% this year.