Cisco Leads Dow Stocks After Earnings, Job Cuts: What to Know
Cisco Systems is the best Dow Jones stock Thursday after the tech giant beat earnings expectations and announced a new round of layoffs.
Cisco Systems (CSCO) is the best Dow Jones stock Thursday after the networking equipment specialist beat top- and bottom-line expectations for its fiscal fourth quarter and announced a 7% reduction to its global workforce.
In the three months ended July 27, Cisco said its revenue decreased 10.3% year-over-year to $13.6 billion, pressured by a 28% drop in networking revenue to $6.8 billion. Its earnings per share (EPS) fell by 23.7% to 87 cents.
"We delivered a strong close to fiscal 2024," said Cisco CEO Chuck Robbins in a statement. "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 artificial intelligence (AI)."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Despite the decline in both the top and bottom lines, Cisco's results topped analysts' expectations. Wall Street was anticipating revenue of $13.5 billion and earnings of 85 cents per share, according to CNBC.
In a separate filing, Cisco announced a restructuring plan that will "allow it to invest in key growth opportunities and drive more efficiencies in its business." As part of its restructuring efforts, the company will be eliminating approximately 7% of its global workforce. This marks its second round of layoffs this year, with the Cisco Systems cutting 5% of its labor force back in February.
Cisco also provided an outlook for the first quarter and new fiscal year. For the first quarter, CSCO anticipates revenue in the range of $13.65 billion to $13.85 billion and earnings per share to arrive between 86 cents to 88 cents. For all of fiscal 2025, the company is guiding for revenue of $55 billion to $56.2 billion and EPS in the range of $3.52 to $3.58.
Cisco's outlook satisfies what analysts are anticipating. According to Yahoo Finance, Wall Street is forecasting revenue of $13.65 billion and earnings of 85 cents per share for the first quarter. For the full year, expectations are for revenue of $55.6 billion and earnings of $3.56 per share.
Is Cisco stock a buy, sell or hold?
Cisco Systems has struggled on the price charts this year, down 13% on a total return basis (price change plus dividends) vs the S&P 500's 23% gain.
Still, Wall Street leans bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for CSCO stock is $53.71, representing implied upside of about 10% to current levels. Meanwhile, the consensus recommendation is Buy, though with low conviction.
Financial services firm Oppenheimer is one of the more bullish outfits on CSCO stock with an Outperform rating (equivalent to a Buy) and a $58 price target.
"Cisco remains the dominant networking vendor, with strong underlying fundamentals," says Oppenheimer analyst Ittai Kidron. "We see Cisco as well positioned for the next-generation virtualized data center given its history of strong execution and M&A, product breadth, geographic diversity, and scale advantages."
The analyst adds that he's upbeat on the opportunities available in software-as-a-service (Saas) and Cisco's cloud segment, which includes security and collaboration. These initiatives, Kidron adds, will likely drive more recurring revenue.
The analyst also points to stock buybacks, which are likely to support the share price. In fiscal 2024, Cisco repurchased $5.8 billion of its own stock.
Related Content
-
Your Guide to Buying Art OnlineFrom virtual galleries to social media platforms, the internet offers plenty of places to shop for paintings, sculptures and other artwork without breaking the bank.
-
Samsung Galaxy S25 Ultra for $4.99 a Month: A Closer Look at Verizon’s DealVerizon’s aggressive pricing makes Samsung’s top-tier phone tempting, but the real cost depends on your plan and how long you stay.
-
I'm 59 with $1.7 million saved and lost my job. Should I retire?We asked professional wealth planners for advice.
-
A Wealth Adviser Explains: 4 Times I'd Give the Green Light for a Roth Conversion (and 4 Times I'd Say It's a No-Go)Roth conversions should never be done on a whim — they're a product of careful timing and long-term tax considerations. So how can you tell whether to go ahead?
-
A 4-Step Anxiety-Reducing Retirement Road Map, From a Financial AdviserThis helpful process covers everything from assessing your current finances and risks to implementing and managing your personalized retirement income plan.
-
The $183,000 RMD Shock: Why Roth Conversions in Your 70s Can Be RiskyConverting retirement funds to a Roth is a smart strategy for many, but the older you are, the less time you have to recover the tax bite from the conversion.
-
A Financial Pro Breaks Retirement Planning Into 5 Manageable PiecesThis retirement plan focuses on five key areas — income generation, tax management, asset withdrawals, planning for big expenses and health care, and legacy.
-
4 Financial To-Dos to Finish 2025 Strong and Start 2026 on Solid GroundDon't overlook these important year-end check-ins. Missed opportunities and avoidable mistakes could end up costing you if you're not paying attention.
-
Nasdaq Leads as Tech Stages Late-Week Comeback: Stock Market TodayOracle stock boosted the tech sector on Friday after the company became co-owner of TikTok's U.S. operations.
-
Are You Putting Yourself Last? The Cost Could Be Your Retirement SecurityIf you're part of the sandwich generation, it's critical that you don't let the needs of your aging parents come at the expense of your future.
-
I'm an Insurance Pro: It's Time to Prepare for Natural Disasters Like They Could Happen to YouYou can no longer have the mindset that "that won't happen here." Because it absolutely could. As we head into 2026, consider making a disaster plan.
