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Cisco comes out fighting

by on16 August 2018

Does better than Wall Street expected

Cisco beat the cocaine nose jobs’ of Wall Street targets for quarterly revenue and profit and forecast first quarter sales above estimates.

It is starting to look like the network gear maker’s transition to a software-focused company has legs.

Cisco has been launching new products focused on high-growth areas such as cyber security and Internet of Things to cushion sluggish demand in its traditional routers and switches business.

Chief Financial Officer Kelly Kramer told analysts: “We’re seeing the returns on the investments we are making in innovation and driving the shift to more software and subscriptions on a post-earnings call.”

The company forecast first-quarter revenue growth of between five percent and seven percent, implying $12.86 billion at the mid-point.

Analysts were expecting a revenue of $12.61 billion, depending on who you talked to last.

Subscriptions, which provide a more steady revenue stream, represented 56 percent of total software revenue in the reported quarter, the company said.

Revenue in the security business, which offers firewall protection and breach detection systems, rose 12 percent to $627 million, beating estimates of $615.8 million. Deferred revenue in the business jumped 23 percent.

Cisco said in August it would buy cyber security provider Duo Security for $2.35 billion, the latest in a series of acquisitions by Chief Executive Officer Chuck Robbins as he builds out the company’s newer businesses.

CFO Kramer told Reuters Cisco is looking at more acquisitions in the security space.

Revenue in its infrastructure platform division, which houses the company’s traditional business of supplying switches and routers, rose 7 percent to $7.44 billion. Analysts had expected revenue of $7.32 billion.

Total revenue rose six percent to $12.84 billion, topping the average estimate of $12.77 billion.


Last modified on 16 August 2018
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