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Cisco Systems (CSCO) Posts Earnings Beat, Shares Slide on Weak Guidance

Madeleine Johnson

Cisco Systems Inc. CSCO just released its third quarter fiscal 2017 financial results, posting earnings of 60 cents per share and revenues of $11.9 billion. Currently, CSCO is a #4 (Sell) on the Zacks Rank, and is down 5.38% to $32.01 per share in trading shortly after its earnings report was released.


Beat earnings estimates. The company reported non-GAAP earnings of 60 cents per share, topping the Zacks Consensus Estimate of 53 cents per share. This number excludes 10 cents from non-recurring items.

Beat revenue estimates. The company saw revenues of $11.9 billion, just edging past our consensus estimate of $11.88 billion but decreasing 1% year-over-year. Product revenue performance was led by Wireless and Security, which increased by 13% and 9%, respectively.

Non-GAAP total gross margin and product gross margin were 64.4% and 63.2%, respectively. This was a decrease from the prior-year period, primarily due to pricing and product mix that was partially offset by continued productivity improvements.

Looking ahead to Q4, Cisco expects revenues to decline (6)% to (4)% year-over-year, with non-GAAP earnings per share in the range of 60 cents to 62 cents.

"I am pleased with the progress we are making on the multi-year transformation of our business," said Chuck Robbins, CEO, Cisco. "The Network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure."

Here’s a graph that looks at Cisco’s price, consensus, and EPS surprise:

Cisco Systems, Inc. Price, Consensus and EPS Surprise

Cisco Systems, Inc. Price, Consensus and EPS Surprise | Cisco Systems, Inc. Quote

Cisco Systems, Inc. is the worldwide leader in networking for the Internet. Cisco's Internet Protocol-based networking solutions are the foundation of the Internet and most corporate, education, and government networks around the world. Cisco provides the broadest line of solutions for transporting data, voice and video within buildings, across campuses, or around the world.

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