Cisco returns to growth, stock pops
Cisco's biggest product segment, infrastructure platforms, which includes switches for data centers, saw 2 percent revenue growth, with $6.69 billion, above the FactSet consensus estimate of $6.62 billion, according to StreetAccount.
With acquisitions like AppDynamics, Cisco has sought to bring in growth from recurring revenue. In the fiscal second quarter Cisco's applications revenue of $1.18 billion was up 6 percent year over but below the FactSet estimate of $1.2 billion, according to StreetAccount.
In a statement Cisco said it took an $11.1 billion one-time charge because of recently enacted U.S. tax reform. Cisco's tax provision rate for the fiscal second quarter was 20 percent, excluding certain items, down from 22 percent one year earlier. Cisco said that it has set aside $25 billion in share repurchases, bringing the total to $31 billion.
In terms of guidance for the fiscal third quarter, Cisco expects earnings of 64 to 66 cents per share, excluding certain items, on 3 to 5 percent more revenue than it received for the year-ago quarter. Analysts were looking for 63 cents, excluding certain items, on $12.13 billion in revenue for the fiscal third quarter, according to Thomson Reuters. In the fiscal third quarter Cisco expects a 21 percent rate, excluding certain items.
The Catalyst 9000 switch product is the fastest ramping product in Cisco's history, Robbins told analysts on the company's conference call after disclosing earnings on Wednesday. There were no shortages or supply issues in the quarter, Cisco CFO Kelly Kramer said.
In its fiscal second quarter Cisco announced the Spark voice assistant for meetings, as well as a $1 billion City Infrastructure Finance Acceleration Program. Cisco stock is up 10 percent since the beginning of the year.
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