Cisco Systems reported fiscal fourth-quarter earnings and revenue that fell from a year earlier but topped Wall Street estimates. Cisco stock rose as business trends improved for its core computer networking business.
The company released earnings after the market close on Wednesday. Financial results included recently acquired software maker Splunk.
In addition, Cisco said it would cut about 7% of its workforce as part of a restructuring, which will result in up to $1 billion in pretax charges.
"The fourth-quarter print did not stray far from expectations and reflected continued stabilization in Cisco's business as it contends with a slower networking business and broader macro headwinds," said William Blair analyst Jason Ader in a report. "Nonetheless, order growth recovery (up 6% on an organic basis), and order strength, in particularly across data center switching, routing, and wireless, support the thesis that networking demand has troughed, setting the stage for a recovery in fiscal 2025."
For the period that ended July 27, Cisco earnings fell 24% to 87 cents. Revenue fell 10% to $13.6 billion. Analysts estimated that Cisco would earn 85 cents per share on revenue of $13.5 billion, according to FactSet. Earnings and revenue fell for the third straight quarter.
On the stock market today, Cisco stock rose 7.6% to 48.90 in early trading.
Cisco Stock: Guidance Above Views
For the first quarter of fiscal 2025 ending in October, Cisco forecast sales of $13.75 billion at the midpoint of its outlook. Analysts predicted that sales would fall 6% to $13.7 billion.
Meanwhile, Cisco has already forecast fiscal 2025 revenue growth in "low to mid single-digit growth." It has forecast revenue growth of 4% to 6% in fiscal 2026 and fiscal 2027.
Heading into the Cisco earnings report, the company had a Relative Strength rating of 22 out of a best-possible 99, according to IBD Stock Check-up. CSCO stock had retreated 10% in 2024.
In addition, Cisco has shifted away from its core business of selling network switches and routers. With acquisitions, Cisco aims to increase revenue from software and services.
Cisco recently closed the acquisition of software company Splunk for $25 billion in cash. With roots in data analytics software, Splunk has expanded into cybersecurity.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
