Cisco Beats Earnings on Top and Bottom Lines Again - Analyst Blog

Tech giant Cisco Systems ( CSCO ) has again beaten estimates in both sales and earnings for its fiscal Q1 of 2015, at a time when its main competitors like IBM ( IBM ) and Oracle ( ORCL ) were disappointing investors by missing quarterly estimates earlier this earnings season. Cisco brought in a one-cent beat on earnings per share of 49 cents (basic, before non-recurring items) on revenues of $12.25 billion in the quarter.

Cisco has not missed estimates on the bottom line in 6 years, but this is also the third straight beat on the top line -- revenues had been expected to come in at $12.14 billion. Shares of CSCO jumped immediately on the news near 3% before slowly trading off to an after-market gain of roughly 1%.

The company is clearly succeeding where IBM and Oracle have been faltering; much of this may have to do with Cisco's relatively early forays into the cloud-based space. Cloud computing's growth trajectory remains much higher than the routers and switches businesses in which Cisco has been a long-time industry leader. To that end, gross margins in the September quarter reached 63.3%, also higher than expected.

Guidance for fiscal 2015 will be forthcoming in Cisco's conference call; some slight negative revisions from analysts have taken projections down a penny for the current fiscal year over the past month or so. The Zacks consensus estimate for revenues in fiscal Q2 is $12.12 billion prior to the call. One final potential wrinkle on the call has to do with the announcement that CFO Frank Calderoni will be stepping down as of January 1st, 2015.

At the closing bell Wednesday, Cisco shares had climbed 11.7% year-to-date, more than 7% of which has come in the past month. Partly this is a result of trading indexes continuing to reach all-time highs, but much of it certainly speaks to Cisco's highly capable management team. Before the earnings announcement, Cisco shares had a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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