Cisco Shares Jump 5% in After-Hours Trading After Earnings, Revenue and Outlook Beat
$Cisco (CSCO.US)$ shares jumped 5% in after-hours trading after the company reported earnings and revenue that beat analysts' estimates and provided an outlook for next fiscal year that surpassed consensus.
The company said adjusted earnings in the three months ended July 27 reached 87 cents a share, surpassing the 85 cents a share expected by analysts, according to estimates compiled by Bloomberg. Revenue reached 13.65 billion, higher than the 13.53 billion analyst consensus. The results were boosted by increasing demand for artificial intelligence (AI).
Cisco is also cutting about 7% of its global workforce as part of a restructuring plan that will allow the company to invest in key growth opportunities and drive more efficiencies, according to a filing with the Securities and Exchange Commission late Wednesday.
The company said the quarterly results were buoyed by strong subscription revenue and annualized recurring revenue, enhanced by the contribution from Splunk which was acquired by Cisco.
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"We delivered a strong close to fiscal 2024," CEO Chuck Robbins said in the company's earnings release late Wednesday. "In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI."
For the fiscal first quarter ending in March, Cisco forecast revenue of $13.65 billion to $13.85 billion. The midpoint of that outlook exceeded the average analyst estimate of $13.7 billion. Adjusted earnings per share was seen ranging from 86 cents to 88 cents for the quarter, higher the 85 cents expected by analysts.
Cisco said as a result of the job cuts, it will recognize pre-tax charges of as much as $1 billion to its financial results, which will include severance and one-time termination benefits and other charges. The charges will primarily be cash-based. The company said it expects to recognize $700 million to $800 million of the charges in the first quarter of fiscal year 2025 and the rest during the remainder of the year.
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