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Tickers in this Article: CSCO
Cisco Systems (Nasdaq:CSCO) announced its results for the fourth quarter on August 15, 2012. Cisco Systems is a multinational corporation engaged in the design, manufacturing, and sales of Internet Protocol-based consumer electronics, networking, and other services related to communications and information technology.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Surprising Earnings Results

The Numbers: Though Cisco Systems' EPS fell short of estimates, the company's revenues managed to trump predictions. The company reported 36 cents per share versus the 41 cents per share estimate and revenues of $11.69 billion versus the $11.58 billion estimate. EPS rose 63.6% while revenue climbed 4.4% from the same period last year. Cisco Systems' revenue has grown during each of the past four quarters on a year-over-year basis. The company's net income for the quarter was $1.92 billion. This is 55.6% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: "As a result of our strong performance, continued execution on our plan to deliver profitable growth, and commitment to shareholders, for the full fiscal year, we delivered revenue growth of 7% as well as a record year in revenue and earnings per share," stated Cisco Chairman and CEO John Chambers. "Our strategy -- delivering intelligent networks and technology architectures, built on integrated products, services and software platforms, to fuel our customers' businesses -- is proving the right long-term strategy for our success. There is no question that our industry and our world are evolving quickly and Cisco is squarely at the center of major technology market transitions -- cloud, mobile, visual, virtual and social."

A Look Back: Gross margin shrank 0.7 percentage point to 60.6%. The contraction appeared to be driven by increased costs, which rose 6.3% from the year earlier quarter while revenue rose 4.4%.

Net income has increased 14.9% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 55.6% from the year-earlier quarter.

Looking Ahead: The outlook for the company's results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 40 cents per share, down from 42 cents 90 days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $1.63 per share, falling from $1.64 30 days ago.

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