Cisco’s stock price movement
Cisco Systems (CSCO) stock increased 3.92% in after-hours trading on February 13 after the tech giant reported upbeat results for the second quarter of fiscal 2019, which ended January 26, wherein the company exceeded Wall Street expectations on both earnings and revenues. Cisco also forecasts a strong third-quarter outlook, topping Wall Street expectations, which further fueled the stock price momentum. Cisco Systems has raised its quarterly dividend by 6% and increased its share buyback authorization plan.
Cisco stock has gained 10.5% year-to-date as of February 13 and nearly 11.1% in the past year. Peers Ericsson (ERIC) and GoPro (GPRO) also increased by 5.5% and 32.3%, respectively, on a year-to-date basis. Juniper (JNPR), however, declined 0.7% in the same period.
Cisco’s impressive Q2 results
Cisco posted earnings of $0.73 per share and revenues of $12.45 billion in the third quarter, beating analysts’ estimates of $0.72 per share and $12.41 billion, respectively, owing to the growing momentum in its newer applications and security businesses. Further, the network gear maker witnessed steady demand for its routers and switches despite trade war fears. Reportedly, some analysts were skeptical about the impact of the US-China trade war on its networking gear business, as some of the switches and routers are manufactured in China.
Amid slowing demand for its routers and switches, Cisco is shifting its focus to new growth areas such as software, which is pushing up growth momentum. According to Cisco’s chair and chief executive, Chuck Robbins, the company is increasingly focusing on cloud computing, which is further driving the company’s growth.