Cisco Systems (NASDAQ:
) is up more than six percent Wednesday morning after the company
reported that its fiscal
came in at $11.9 billion (an increase of six percent year over
year), beating the analyst consensus of $11.78 billion. Net
income arrived at $2.6 billion -- an increase of 11 percent year
over year -- with an EPS of $0.48.
"We delivered record results this quarter -- with revenue
growth of 6 percent and strong earnings per share growth --
demonstrating our vision and strategy are working," John
Chambers, chairman and CEO, said in a
. "Our innovation engine, operational discipline and on-going
evolution are enabling us to differentiate in the market."
Chambers also spoke about the company's transition to cloud
mobility and video. In October, Cisco announced that it had
extended its partnership with Citrix (NASDAQ:
networking, cloud and mobility.
Despite the emphasis on cloud computing, Chambers said that he
believes "the largest market transition lies ahead of us, as the
Internet of Everything becomes a reality."
Cisco also formed a
satellite service alliance
with Inmarsat. The long-term alliance will allow Cisco to provide
Inmarsat with a state-of-the-art satellite applications service
delivery platform and a high-performance access network for
Inmarsat's Global Xpress program.
Not all of Cisco's partnerships have been as fruitful. On
October 8, the firm announced that it would
end its sales agreement
with ZTE Corp (OTC:
) after the company sold Cisco's computer and telecommunications
equipment to Iran. In doing so, ZTE violated U.S. sanctions,
forcing Cisco to take action.
In the days leading up to Cisco's earnings release, analysts
were somewhat skeptical of the company's future. J.P. Morgan
downgraded the stock to Neutral
and lowered its PT from $21 to $17. The researcher argued that
while J.P. Morgan is not making a call on the firm's
first-quarter results, "[we] do believe FQ2'13 guidance is likely
to disappoint and expect 2013 to be a tough year as macro
pressures persist (weak enterprise and government spending,
from Buy to Hold and lowered its PT from $20.50 to $19.50.
Now that the company's first-quarter results have surpassed
expectations, Deutsche Bank has
raised its PT
from $21 to $22. Deutsche Bank referred to Cisco as a
"fundamentally sound business" and said that the "inline Q1 guide
($12.05B / $0.47 on the mid point); B/B below 1.0x is indicative
of gradually improving IT spending trends, heading into
BMO Capital Markets, which said that Cisco "defied
expectations and delivered a solid quarter and marginally better
its Outperform rating on the stock.
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