Cisco trumps estimates and increases guidance
NETWORK equipment maker Cisco Systems last night promised further revenue growth after its second quarter results beat estimates thanks to a restructuring, leading to a dividend increase.
The company, a sector bellwether because of its global scale and diverse client base, forecast five to seven per cent growth in fiscal third quarter revenue.
That translates into a sales outlook of $11.4bn to $11.6bn (£7.2bn to £7.3bn), matching or slightly exceeding Wall Street’s average forecasts.
Executives also forecast gross margins of 61.5 to 62 per cent in the fiscal third quarter ending April.
“Broadly speaking, people expected a good quarter. This is probably a little better than expected and the dividend is an added surprise,” said Mizuho Securities analyst Joanna Makris.
Revenue rose 10.6 per cent from the year-ago quarter to $11.5bn. Analysts on average were expecting $11.23bn.
Net income grew to $2.2bn, or 40 cents per share, from $1.5bn, or 27 cents share, a year earlier.
•Credit card giant Visa posted a first quarter profit of $1bn, up 13 per cent, as revenues grew 14 per cent to $2.5bn.