Attendees walk past a Cisco logo during the Web Summit in Lisbon on November 2, 2021.
Carlos Costa/AFP via Getty Images
Systems shares are trading sharply higher in late trading Wednesday after the networking equipment provider posted solid results for its fiscal second quarter ended Jan. 28, while sharply increasing its outlook for the full year.
Cisco now expects fiscal 2023 to be its best growth year in at least a decade. The strong earnings report and surprising outlook should provide a boost to investor sentiment on the outlook for enterprise technology spending.
Cisco shares in late trading are 6% higher at $51.40.
For the quarter, Cisco (ticker: CSCO) reported revenue of $13.6 billion, up 7% from a year ago, in line with Wall Street estimates, but with growth a little ahead of the company’s guidance range of 4.5% to 6.5%. Adjusted profits of 88 cents a share were ahead of both the company’s guidance range of 84 to 86 cents and Wall Street’s consensus estimate of 85 cents. Non-GAAP gross margin was 63.9%, towards the top end of the company’s target range of 63% to 64%
Annualized recurring revenue at quarter end was $23.3 billion, up 6%. Total remaining performance obligations, a measure of work contracted for but not yet performed, is $31.8 billion, up 4% from a year earlier.
Orders were down 22% from a year ago, not a big surprise after a period of 30%-plus growth for several consecutive quarters a year ago.
For the fiscal third quarter, Cisco is projecting revenue growth of 11% to 13%, which at the middle of the range implies $14.4 billion, well above the Wall Street consensus forecast of…