Cisco Systems (CSCO) stock is trading lower Thursday even after the networking equipment specialist beat top- and bottom-line expectations for its fiscal 2025 first quarter and raised its full-year outlook.
In the three months ended October 26, Cisco's revenue decreased 5.6% year over year to $13.8 billion, pressured by a 28% decline in its Networking segment to $6.8 billion. Its earnings per share (EPS) were down 18% from the year-ago period to 91 cents.
"Cisco is off to a strong start to fiscal 2025," said CEO Chuck Robbins in a statement. "Our customers are investing in critical infrastructure to prepare for artificial intelligence (AI), and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
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.
The results beat analysts' expectations. Wall Street was anticipating revenue of $13.77 billion and earnings of 87 cents per share, according to CNBC.
Since its Q1 results came in at the high end or above its guidance range, Cisco raised its outlook for the full fiscal year. The company now expects to achieve revenue in the range of $55.3 billion to $56.3 billion and earnings per share between $3.60 to $3.66. This compares to its previous forecast for revenue in the range of $55 billion to $56.2 billion and EPS of $3.52 to $3.58.
"We are focused on solid execution and operating discipline while making strategic investments to drive innovation and growth," said Cisco Chief Financial Officer Scott Herren.
Is Cisco stock a buy, sell or hold?
Cisco Systems is up 17% for the year to date on a total return basis (price change plus dividends) and Wall Street is moderately bullish on the blue chip stock.
According to S&P Global Market Intelligence, the average analyst target price for CSCO is $60.37, representing implied upside of roughly 5% to current levels. Meanwhile, the consensus recommendation is Buy.
Financial services firm Jefferies is one of those with a Buy rating on the Dow Jones stock. It also raised its price target on Cisco to $66 from $53 after earnings.
"Cisco reported solid results and guidance, bolstered by depleted customer inventory and positive AI commentary," wrote Jefferies analyst George Notter in a November 13 note. "Splunk was better than we expected. Order trends were strong – albeit on easy year-ago comparisons. Margins are looking good too as the company continues to manage costs tightly. We still think the risk/reward in the shares is tilted positively."
Related Content
- Kiplinger's Earnings Calendar for This Week
- Why Is Warren Buffett Selling So Much Stock?
- Best Dividend Stocks to Buy for Dependable Dividend Growth
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market TodayMarket participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
I Inherited $50,000, and My Retirement is Already Fully Funded. Where's the Best Place to Store It for Maximum Growth?These savings solutions can help you maximize returns without the risk.
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market Today
Market participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
A Broad Approach to Innovative Trends Helps This SPDR ETF OutperformThe SPDR S&P Kensho New Economies Composite's bets on transformational technologies have sparked volatility – and big gains – this year.
-
The Best Invesco ETFs to BuyInvesco's expansive and diverse ETF lineup includes multiple notable candidates for serious investors. Here are the best Invesco ETFs to buy.
-
Parents and Caregivers: Don't Miss Your Roth Conversion WindowCaring for a child or parent can mean a drop in income and a lower tax bracket. Why not take advantage by moving money into a Roth account? Here's how it works.
-
Testing the Retirement Waters in Florida? A Partial Plunge May Negate Tax BreaksMost folks know Florida is a tax-friendly state, but they might not know that part-time residents may not qualify, as our cautionary tale shows.
-
Catch-Up Contributions for Higher Earners in 457(b) Plans: What You Need to KnowGovernment 457(b) plans are about to get more complex as new Roth catch-up requirements come into force. Here's how to prepare for the changes.
-
Stocks Rally as Investors Buy the Dip: Stock Market TodayMost sectors are "go" only a day after talk of bubbles, extended valuations and narrow breadth undermined any kind of exuberance.
-
Elon Musk's $1 Trillion Pay Package Passes: What's at Stake for Tesla StockMore than 75% of Tesla shareholders voted to approve a massive pay package for CEO Elon Musk. Here's what it means for the Mag 7 stock.
