Cisco Systems' 2022 revenue outlook keeps getting better amid component shortages and supply-chain issues. CSCO stock rose Thursday despite a pull-back on the Nasdaq as January-quarter earnings topped estimates.
The tech giant reported fiscal second-quarter earnings after the market close on Wednesday. Management lifted fiscal 2022 top-line growth guidance from 4.5% to 6.5% to 5.5% to 6.5%. The fiscal year ends in July.
The Cisco board of directors authorized an additional $15 billion stock repurchase program. The new buyback comes amid speculation that Cisco aims to buy Splunk.
Cisco stock rose 2.7% to close at 55.72 on the stock market today.
In fiscal Q2, product orders increased 33% year-over-year, marking the third straight quarter of 30%-plus order growth. Cisco continues to hike prices amid supply chain issues.
"Software growth re-accelerated despite a record $2 billion backlog and perpetual license declines," said Barclays analyst Tim Long in a report. "Cisco sees no signs of significant order pull-forwards, suggesting a durable top-line recovery likely."
For the period ended Jan. 31, Cisco earnings rose 6% to 84 cents a share from a year earlier, the company said. Revenue also rose 6% to $12.72 billion, including acquisitions. Analysts expected Cisco earnings of 81 cents on sales of $12.66 billion.
A year earlier, Cisco earnings were 79 cents a share on sales of $11.96 billion.
For the current quarter ending in April, the company forecast revenue growth of 4% at the midpoint of guidance, in line with estimates.
Cisco Stock Trades Below Entry Point
Heading into the Cisco earnings report, the company owned a Relative Strength Rating of 67 out of a best-possible 99, according to IBD Stock Checkup.
CSCO stock had retreated 14% in 2021.
Cisco stock has shifted away from its core business of selling network switches and routers. With acquisitions, Cisco has aimed to increase revenue from software and services.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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