Thursday, May 14, 2015

Cisco Drops A Fraction After Reporting Better-Than-Expected FQ3 Revenue Of $12.14B

At the end of regular trading, Cisco reported its fiscal 2015 third-quarter financial performance. The networking company earned $0.54 per share using adjusted metrics on revenue of $12.14 billion. The street had expected a profit of $0.53 per share on top line of $12.07 billion.
The company’s revenue grew 5 percent compared to the year-ago period. Up a fraction in regular trading, Cisco is down a sliver in after-hours trading. The company went into its earnings cycle worth north of $150 billion.
Using normal accounting techniques (GAAP), Cisco had net income during the fiscal period of $2.4 billion. The company’s profit on a non-GAAP, or adjusted basis, totaled $2.8 billion during the three-month window.
The firm spent $1.1 billion on dividends during the quarter, and $1 billion more to acquire its own shares. This is a fine time to restate the following: Share-based compensation becomes a cash cost to a business once the firm is forced to start repurchasing its own shares. As such, share-based compensation, and the non-GAAP earnings per share that come along with it, essentially discount future negative cash flows. Anyway.
Cisco ended the quarter with just over $54 billion in cash, equivalents and investments.
Recently, Cisco selected its own executive Chuck Robbins to be its new CEO. John Chambers, its long-time leader, had some choice words to go along with his mantle-dropping:
I am extremely honored and proud to have led Cisco for the last 20 years and to get us to this positive inflection point. We have a tremendous opportunity to extend our lead in the industry, and with Chuck Robbins as the CEO for Cisco’s next chapter, we have exactly the right leader to capture that opportunity. I could not be more confident in our future.
I try to avoid quoting executives from canned earnings comments, but given the length of Chambers’ tenure, it feels like fair play.
All told, it’s a solid quarter from Big Switch. Investors appear to be a bit flat on the results, but you can’t please everyone.

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