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Did Cisco Beat Analysts’ Estimates in Fiscal 2Q17?

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Revenue rose 1% YoY

On February 15, 2017, Cisco Systems (CSCO) announced its fiscal 2Q17 results. It reported revenue of $11.6 billion, a fall of 2% YoY (year-over-year), with EPS (earnings per share) of $0.57. While its product revenue fell 4%, its service revenue rose 5% in fiscal 2Q17. Analysts had expected EPS of $0.56 and revenue of $11.6 billion in the quarter.

Cisco’s product revenue was driven by a 14% YoY rise in its Security segment and a 4% YoY rise in its Collaboration segment in fiscal 2Q17. Revenues in its Switching, Routing, and Data Center businesses fell 5%, 10%, and 4%, respectively, in fiscal 2Q17. Revenue from its Service Provider Video segment fell 41%, whereas revenue from its Wireless segment rose 3% in fiscal 2Q17.

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Other highlights

On a GAAP (generally accepted accounting principles) basis, Cisco’s net income was $2.3 billion with EPS of $0.47 in fiscal 2Q17. On a non-GAAP basis, its net income and EPS fell 2% each in fiscal 2Q17 to $2.9 billion and $0.57, respectively.

Cisco’s GAAP gross margin and product margin stood at 62.8% and 61.1%, respectively, in the quarter. Its GAAP operating expenses rose 6% YoY to $4.4 billion, primarily due to “the gain recorded in the second quarter of fiscal 2016 from the sale of the SP Video CPE Business,” according to the company. Cisco’s cash flow from operations was $3.8 billion in fiscal 2Q17, compared to $3.9 billion in fiscal 2Q16.

Cisco is a market leader in the networking space. It has a market cap of $171 billion. Its main competitors include Dell Technologies (DVMT), Juniper Networks (JNPR), and Europe’s (EFA) Ericsson (ERIC). These companies have market caps of $14.1 billion, $10 billion, and $20 billion, respectively.

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