Cisco jumps 7% after reporting its first revenue growth in 2 years

Photo by Jerod Harris/Getty Images for Kairos Society(L-R) CEO of ConnectHQ Ian Swanson, Vice President of CISCO Systems Pankaj Srivastava, Director of CISCO Services Peter Mason, Director of Global Product Management for Belkin Ohad Zeira and CEO of DGLogik Eugene Mazo attend the 2014 Kairos Global Summit at Ritz-Carlton Laguna Nigel on October 17, 2014 in Dana Point, California.

Shares of Cisco climbed 7% early Thursday after the computer-networking company reported quarterly earnings that beat Wall Street expectations.

The company said revenue rose 3% versus a year ago to $US11.9 billion, making for its first growth in two years. This was above analysts’ expectations pf $US11.81 billion. It reported adjusted earnings of $US0.63 per share, above estimates of $US0.59.

The Silicon Valley conglomerate also offered investors strong forward guidance, projecting 3% to 5% year-over-year revenue growth for the third quarter, a stark comparison to the 1% growth it projected in January.

According to one analyst, Cisco could be reversing investor perceptions that it’s a “melting ice cube” up against workload migration and market share pressures. Instead, Cisco showed it can boost profit through new product cycles, accelerating growth rates, and strong margins.

“Growing economies, data growth, and the general shift to a Big Data/Analytics-driven world are big (and accelerating) drivers for them,” George Notter, an equities analyst at Jefferies, wrote.

Notter raised his price target to $US48 per share from $US40.

Cisco’s stock was up 16.52% for the year.

Read more about how Cisco is partnering up with Google to take on Amazon and Microsoft.

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