Cisco CEO Chuck Robbins speaks on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland, January 22, 2025.
Jerry Miller CNBC
Cisco reported better-than-expected profits and sales in its first quarter results on Wednesday. Shares rose about 5% in extended trading.
Here’s how the company performed compared to LSEG’s consensus forecasts:
Earnings per share: $1 adjusted, 98 cents expected Earnings: $14.88 billion, $14.77 billion expected
Cisco said in a statement that revenue increased 8% from $13.84 billion in the same period last year. Net income was $2.86 billion, or 72 cents per share, up from $2.71 billion, or 68 cents per share, in the year-ago period.
This was Cisco’s fourth straight quarter of growth after four consecutive quarters of year-over-year revenue declines as it battled economic uncertainty and delayed spending from government agencies.
Revenue from Cisco’s networking business, its largest division, rose 15% to $7.77 billion. Analysts had expected the segment’s sales to be $7.47 billion, according to Street Accounts.
Most of the growth in data center spending is focused on artificial intelligence, as companies ramp up investments in servers that primarily feature graphics processing units. Nvidia. Cisco is looking to align more closely with the AI boom, announcing last month a new Ethernet switch based on Nvidia silicon.
Cisco said AI infrastructure orders from “hyperscaler customers” reached $1.3 billion, “reflecting a significant acceleration in growth.”
“Our relevance in AI continues to grow,” CFO Mark Patterson said in a press release. “We have a multi-year, multi-billion dollar campus renewal opportunity, and demand for updated network products is strong and starting to increase.”
For its fiscal second quarter, Cisco said it expects revenue to be between $15 billion and $15.2 billion, higher than the average estimate of $14.6 billion, LSEG said. Adjusted earnings are expected to be $1.01 to $1.03 per share, beating the average estimate of 99 cents.
Cisco said it expects full-year sales of $60.2 billion to $61 billion and earnings per share of $4.08 to $4.14. Analysts expect sales of $59.7 billion and EPS of $4.04.
While networking grew and performed better than expected, Cisco’s other two major divisions saw revenue decline and fall short of Wall Street expectations.
According to Street Accounts, revenue for the company’s security division fell 2% from a year earlier to $1.98 billion, below average expectations of $2.16 billion. Collaboration sales also fell 3% to $1.06 billion, below the average estimate of $1.09 billion.
Cisco stock has risen 25% since the beginning of the year as of Wednesday’s close, outpacing the Nasdaq’s 21% rise.
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