UPDATE - 5:01 pm: Cisco's management gave guidance during the conference call that fell within expectations. Fiscal second quarter revenues are forecast to grow between 3.5% and 5.5% by the company, compared to a 5.2% consensus estimate. Non-GAAP EPS should come in between 47 and 48 cents, while Wall Street called for 48 cents. Gross margin should be between 61% and 62% (estimate was 61%).
The stock continued its afterhours rally, trading up 7.7% to $18.15.
Cisco posted first quarter earnings after the bell on Tuesday, beating top- and bottom-line estimates on what chief executive John Chambers called a “record” quarter. The company revealed a $45 billion cash pile and net margin of 60.95%, just down from 61.2% a year ago.
Net income grew 11% on a non-GAAP basis to $2.6 billion, translating to an adjusted EPS of 48 cents, two cents above the consensus estimate.
Revenue grew 6% to $11.9 billion, also inching above Wall Street’s forecast which called for $11.8 billion. The company saw its net margin slide marginally to 60.95%, and announced it spent approximately $1 billion in dividends and share buybacks through their fiscal first quarter.
"We delivered record results this quarter -- with revenue growth of 6 percent and strong earnings per share growth -- demonstrating our vision and strategy are working," said John Chambers, chairman and chief executive officer, Cisco. “[We are] at the center of the major market transitions -- cloud, mobility, video -- and yet we believe the largest market transition lies ahead of us, as the Internet of Everything becomes a reality."
Cisco also revealed a pretty hefty cash pile. The company headed by Chambers is sitting on $45 billion, just down from the $48.7 billion it had a year ago.
It’s been a difficult last couple of months for the tech sector, with the Nasdaq down approximately 9% over the last three months. Apple, the U.S.’ biggest publicly traded company, has done even worse, falling 14% in the time frame, while Google remained flat. Names like IBM and Oracle are down between 4% and 5%.
Investors seemed pleased with Cisco’s financial performance. After closing the day essentially flat, the stock took off in early after hours trading, rallying 6.1% to $17.87 by 4:22 PM in New York.