With increasingly loud announcements of a looming recession on the one hand, and hopes of falling inflation giving the Fed a chance for a pivot on the other, positive earnings surprises released by 'blue chips' give hope that the rebound we are currently seeing in the US stock market can be sustained. Cisco reported its fiscal first quarter results on Wednesday, which topped analysts' estimates in terms of both revenue and earnings per share. The company cited an "improving supply situation" and raised its outlook for 2023, with revenue up 6% year-over-year.
Earnings per share (EPS) were: 86 cents vs. 84 cents expected by Refinitiv analysts
Revenue: $13.6 billion vs. $13.3 billion expected by Refinitiv analysts
Revenue rose 6% year-on-year, while net income fell 10% y/y to $2.7 billion.
- The company now expects sales growth in fiscal 2023 in the range of 4.5% to 6.5%, compared to an earlier forecast of 4% to 6%. CFO Scott Herren said in the company's announcement that Cisco had achieved "good results" and attributed the company's forecasts in part to "an easing of the supply situation.";
- Although Cisco's results topped estimates, the company is struggling to maintain earnings growth as the technology world leans toward offering cloud and subscription software services rather than buying "physical boxes";
- Cisco's main business segment, which includes network switches for data centers, brought in $6.68 billion in revenue, up 12% from a year earlier;
- Internet for the Future, the company's second-largest unit, saw revenues fall 5% to $1.3 billion. This division includes equipment for routed optical networks, which the company acquired from Acacia Communications in 2021;
- Sales in the Collaboration segment, which includes Webex, brought in $1.1 billion in revenue, down 2% year-on-year.
