Cisco beats on second quarter, stock jumps

Cisco CEO Chuck RobbinsCiscoCisco CEO Chuck Robbins

Cisco just released its second quarter earnings and it’s a good one. The stock is climbing in after-hours trading.

It reported:

  • Revenue of $11.8 billion. Analysts were expecting a modest $11.7 billion. That’s a beat.
  • EPS of 57 cents. Analysts were expecting expecting 54 cents. That’s a beat, too.

The stock leaped as much as 9% in the first few minutes after Cisco reported earnings. It’s now up about 6%.

Here’s the press release.

For Q3 guidance, Cisco says it expects revenue growth of 1% – 4% year over year (but it has normalized that to exclude the service provider video business that it sold.)

It expects non-GAAP earnings per share of $0.54 – $0.56, which is in-line with what analysts were expecting.

Cisco has also declared a quarterly dividend of $0.26 per common share, that’s a five cent raise, or 24%, over the previous quarter’s dividend, to be paid on April 27, 2016.

And it also approved a $15 billion increase to its stock buy-back program. Cisco’s board had previously authorised up to $97 billion in stock repurchases and it has about $16.9 billion left to buy its own stock, including this increase.

Here’s a breakdown of how each product segment did, again, noting that Service Provider Video only grew wildly because Cisco has removed the impact of its set-top business, which was previously dragging that division down.

One of the first things that new CEO Chuck Robbins did when he took office last summer was sell the Scientific-Atlanta business.

January 23, 2016                               -------------------------------------------                                Three Months Ended      Six Months Ended                               --------------------   --------------------                                 Amount     Y/Y %       Amount     Y/Y %                               ---------- ---------   ---------- ---------Revenue:  Switching                    $    3,483        (4)% $    7,505         1%  NGN Routing                       1,845         5%       3,638        (2)%  Collaboration                     1,019         3%       2,134        10%  Data Center                         822        (3)%      1,681         9%  Wireless                            613        --%       1,258         3%  Service Provider Video*             569        37%       1,008        25%  Security                            462        11%         947         9%  Other                                77        31%         152        21%                               ----------             ----------    Product -- excluding SP     Video CPE Business             8,890         2%      18,323         4%    Service                         2,944         3%       5,782         2%----------------------------------------------------------------------------      Total -- excluding SP       Video CPE Business          11,834         2%      24,105         3%----------------------------------------------------------------------------  SP Video CPE Business (1)            93                    504                               ----------             ----------      Total                    $   11,927        --%  $   24,609         2%                               ==========             ==========

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