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How Cisco Fared in Fiscal 3Q17

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How Cisco Fared in Fiscal 3Q17 PART 1 OF 8

Did Cisco Beat Analysts’ Estimates in Fiscal 3Q17?

Revenue fell 1% YoY

On May 17, 2017, Cisco Systems (CSCO) announced its fiscal 3Q17 results. It reported revenue of $11.9 billion, a fall of 1% YoY (year-over-year) with EPS (earnings per share) of $0.60, a rise of 5% YoY. While its product revenue was flat YoY, its service revenue fell 2% in fiscal 3Q17. Analysts had expected EPS of $0.58 and revenue of $11.9 billion in the quarter.

Over 31% of total revenue was recurring in nature compared to 29% of revenue in fiscal 3Q16. Revenue was driven by a 9% YoY rise in its Security segment and a 13% YoY rise in its Wireless segment in fiscal 3Q17. Revenues in its Collaboration, Routing, and Data Center businesses fell 4%, 2%, and 5%, respectively, in fiscal 3Q17. Revenue from its Service Provider Video segment fell 30%, whereas revenue from its Switching segment rose 2% in fiscal 3Q17.

Did Cisco Beat Analysts’ Estimates in Fiscal 3Q17?

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Other highlights

On a GAAP (generally accepted accounting principles) basis, Cisco’s net income was $2.5 billion with EPS of $0.50 in fiscal 3Q17.

Cisco’s GAAP gross margin and product margin stood at 63% and 61.7%, respectively, in the quarter. Its GAAP operating expenses fell 8% YoY to $4.3 billion. Cisco’s cash flow from operations was $3.4 billion in fiscal 3Q17, a rise of 10% YoY compared to $3.1 billion in fiscal 3Q16.

Cisco stock fell over 7% on May 18 to close at $31.38 due in part to weak guidance and the company’s announcement of 1,100 job cuts. Cisco expects revenue between $11.9 billion and $12.1 billion in fiscal 4Q17, a fall of 4%–6% YoY. In comparison, analysts expected Cisco to post revenue of $12.5 billion in fiscal 4Q17.

Cisco is a market leader in the networking space. It has a market cap of $169 billion. Its main competitors include Dell Technologies (DVMT), Juniper Networks (JNPR), and Europe’s (EFA) Ericsson (ERIC). These companies have market caps of $13.5 billion, $11.4 billion, and $22 billion, respectively.

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