Cisco Systems Inc. reported strong quarterly results, pushing its shares higher in after-hours trading Wednesday despite a mixed full-year forecast for fiscal 2024.
“We are seeing solid customer demand, gaining market share, and innovating in key areas like AI, security and cloud. This momentum gives us confidence in our ability to capture the many opportunities ahead,” Cisco Chief Executive Chuck Robbins said in a statement announcing the results.
Cisco CSCO, -0.73% reported fiscal fourth-quarter net income of $ 4 billion, or 97 cents a share, on revenue of $ 15.2 billion, up from $ 13.1 billion a year ago. After adjusting for stock-based compensation and other costs, Cisco reported earnings of $ 1.14 a share, up from 83 cents a share in the same quarter a year ago.
Full-year revenue jumped 11% to $ 57 billion, the company’s best performance in more than a decade. Cisco Chief Financial Officer Scott Herren said the company benefited from backlog orders dating to 2022.
“It was a record quarter in so many ways: revenue, net income, EPS, free cash flow,” Herren said in a phone interview following the results. He added that Cisco has received about $ 500 million in AI-related orders, and can build AI features into existing products.
“We think it is an enormous opportunity for silicon, boxes, our optics business,” he said, pointing to a JPMorgan Chase & Co. JPM, -0.42% study citing a potential market of $ 8.5 billion by 2027.
Also read: Opinion: Cisco’s early AI traction won’t save it from an anemic year ahead
Analysts surveyed by FactSet on average expected adjusted net income of $ 1.06 a share on revenue of $ 15.05 billion. Shares initially tumbled but ended the extended session up 2%. Cisco’s stock closed down 0.7% in regular trading Wednesday at $ 52.96.
Cisco’s Product ($ 11.65 billion) and Service ($ 3.55 billion) businesses were up 20% and 4%, respectively, year over year. Analysts on average expected total product revenue of $ 11.5 billion, according to FactSet.
For the current fiscal first quarter, Cisco executives guided for adjusted earnings of $ 1.02 to $ 1.04 a share in adjusted profit and revenue of between $ 14.5 billion and $ 14.7 billion. Analysts were forecasting adjusted earnings of $ 1 a share and revenue of $ 14.64 billion, according to FactSet.
But full-year fiscal 2024 guidance was cautiously mixed: Cisco sees adjusted earnings of $ 4.01 to $ 4.08 a share on revenue of $ 57 billion to $ 58.2 billion. Analysts polled by FactSet are expecting $ 4.05 a share on revenue of $ 58.4 billion.
Cisco officials are notoriously conservative in full-year projections and could raise quarterly estimates, however.
Shares of Cisco are up 11% this year, while the broader S&P 500 index SPX has gained 15%.