Cisco (CSCO) Stock Soars After Earnings Report
Shares of Cisco Systems, Inc. (CSCO: Charts, News) gained +1.28 or +7.6 percent to $18.13 per share in after-hours trading on Tuesday after the company announced better than expected first quarter profits. Cisco stock had closed at $16.85 per share unchanged from the previous day.
For the company's fiscal first quarter, the company reported non-GAAP earnings of $2.57 billion or $0.48 per share, up +10.6 percent from the same period one year ago. The analyst consensus for Cisco's 1Q results was $0.46 per share. Daily Chart
San Jose, California based Cisco Systems Inc. is the largest maker of computer networking equipment in the world. The company manufactures a large percentage of routers and switches directing traffic over the Internet and corporate networks all over the world. Cisco's quarterly earnings were the fourth consecutive report showing growth after the company had run into problems in the previous four quarters due to rising costs. In an effort to reduce costs, Cisco announced its intention to cut 2 percent of its global workforce or 1,300 jobs. Cisco reported net income of $2.1 billion or $0.39 per share for the quarter ended on October 27th, 2012, compared to $0.33 per share or $1.8 billion in the same period one year ago, an increase of +18 percent. Revenue also rose +5.5 percent to $11.88 billion versus $11.26 billion one year ago, while product sales increased +3.7 percent to $9.3 billion and services revenue increased +11.9 percent to $2.6 billion. Cisco has recently completed the acquisition of several companies including ClearAccess Inc., Lightwire Inc. and NDS Group in its strategy of diversification and accessing new markets. The company has also been a large purchaser of its own stock. Cisco reported it had repurchased 15 million of its shares for a total of 3.8 billion shares valued at $76.4 billion since the beginning of its stock buyback program. In a conference call with analysts after Cisco's earnings release, CEO John Chambers stated, "We continue to deliver the innovation, quality and leadership, our customer expect, and we are evolving the role we play in our customer accounts moving from the top communications company to our goal of becoming the number one IT company." Chambers view of the company's prospects show considerable optimism, "As I look ahead I see the opportunities in the commercial marketplace, cloud, mobility and video, driving our business today. I also see our plans to aggressively expand our software and services business, our emerging markets opportunity and our security architecture as an additional driver of our business going forward." With Cisco's recent acquisitions, the company will broaden its presence in high speed networking applications, video software and other areas including content security. With growing revenues and expanding business opportunities, CEO Chambers optimism seems well founded. Cisco stock has had a 52-week range of $14.96 - $21.30. Given the company's improvement over the last four quarters, many analysts are expecting additional upside for the stock. Other News About CSCO Cisco Systems Inc Acquires Virtual Networking Company vCider
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Published on Nov 14, 2012
By Jay Hawk