Cisco warned investors in November that “uncertainty” in the wider economy would lead to flat year-over-year revenues for the January quarter.
That came true, but Cisco’s profits turned out better than expected, giving investors a good first impression. The company beat most analysts’ expectations by 1 or 2 cents, and non-GAAP earnings for the second quarter were 57 cents per share, beating the consensus of 54 cents, according to Thomson Financial.
Cisco stock was up about 9 percent at $24.59 early in today’s after-hours trading session.
For its second quarter, which ended Jan. 23, Cisco reported revenues of $11.9 billion and net income of $3.1 billion, or 62 cents per share.
In last year’s second quarter, Cisco reported revenues of $11.9 billion and net income of $2.4 billion, or 46 cents per share.
One bright spot for Cisco was its Application-Centric Infrastructure (ACI), which the company said is now at a run rate of $2 billion per year. Second-quarter ACI sales doubled, compared with the previous year’s, CEO Chuck Robbins said on Cisco’s earnings call.
Switching sales overall were down 4 percent from the previous year — due, the company said, to macroeconomic weakness and a dip in campus-switching sales. Data center sales were down 3 percent.
Cisco is predicting revenues of $11.7 billion to $12.1 billion for its third quarter, which ends in April. That’s a gain of 1 to 4 percent year-over-year — not including the set-top box business that Cisco sold to Technicolor, a $604 million deal that closed in November.
“Real” revenue growth might still be flat, however. This year’s third quarter includes an extra week, something that happens to Cisco every five or six years, CFO Kelly Kramer said on the earnings call. That could account for as much as 2 percent growth in year-over-year revenues.