Cisco stock rose more than 6 percent on Wednesday after the company reported better-than-expected earnings for the fourth quarter of its 2018 fiscal year, which ended on July 28.
Here’s how the company performed:
- Earnings: 70 cents per share, excluding certain items, vs. 69 cents per share as expected by analysts, according to Thomson Reuters.
- Revenue: $12.84 billion, vs. $12.77 billion as expected by analysts, according to Thomson Reuters.
As a whole, revenue was up 6 percent year over year from the quarter, while revenue growth for the entire fiscal year arrived on the scene to 3 percent, according to a statement.
The majority of Cisco’s revenue comes coming from sales of hardware like data center networking switches, which is usually included from the Infrastructure Platforms business segment. of which segment generated $7.44 billion, above the FactSet analyst estimate of $7.28 billion. Routing product revenue was down slightly from the quarter because of declines among service provider customers, chief financial officer Kelly Kramer said on a conference call with analysts on Wednesday.
Cisco’s Hyperflex converged data center infrastructure products contributed to the Infrastructure Platforms growth.
“We find ourselves in a lot of head-to-head deals along with winning against Nutanix, which is usually obviously a genuinely tough competitor out there nevertheless we feel not bad about the offer we have,” Kramer said.
The next-largest business segment, Applications, which includes software products like Broadsoft’s cloud contact center technology, was below the $1.4 billion FactSet analyst expectation, at $1.34 billion in revenue.
The Security segment came in above the $614.8 million revenue expectation, at $627 million. along with Cisco’s various other Products segment had $232 million in revenue, below the $255.9 million FactSet consensus estimate.
Across the entire 2018 fiscal year, Cisco had a $10.4 billion charge as a result of U.S. tax reform.
Cisco is usually following Microsoft along with various other technology companies in adopting brand-new the ASC 606 revenue-recognition standards from the 2019 fiscal year.
“of which’s going to accelerate some of our term-based licenses, so we will have to write-off some of our deferred revenue,” Kramer said. “We won’t see of which revenue, nevertheless we will offset of which with acceleration of those offers when we book brand-new orders along with bill brand-new orders.” Cisco had $19.7 billion in deferred revenue from the fiscal fourth quarter, up 6 percent year over year.
from the quarter Cisco announced an expanded cloud partnership with Alphabet’s Google along with the sale of its service provider video software business to Permira Funds. “We believe the divestiture was the right move to make, nevertheless of which will impact near-term results,” Piper Jaffray analysts James Fish along with Andrew Nowinski wrote in a Monday note.
With respect to guidance, Cisco said of which for its fiscal first quarter of which’s expecting to register 70-72 cents per share, excluding certain items, on an implied $12.74-12.99 billion in revenue. Analysts had been expecting guidance of 69 cents per share, excluding certain items, on $12.61 billion in revenue, according to Thomson Reuters.
Cisco stock is usually up about 14 percent since the beginning of 2018.