Cisco Systems Rallies Nearly 5.0% on Strong Earnings in After-hours Trade; Dow Futures Barely Budge

Key Points

• Cisco’s share price surged in after-market trade on Wednesday following an upbeat earnings update.
• The company beat top and bottom-line earning expectations in Q4 of the 2021/2022 fiscal year and gave an upbeat outlook.
• Futures tracking the Dow barely budged in after-market trade.

Cisco Beats Top & Bottom Line Earnings Growth Expectations, Provides Rosey Outlook

Cisco System’s share price jumped in after-market trading hours on Wednesday after the company posted better than expected top and bottom-line earnings results for the fourth quarter of the 2021/2022 fiscal year (FY), and gave an upbeat forecast for earnings growth during the upcoming fiscal year. CSCO shares were last changing hands not far below $49.0, up nearly 5.0% versus Wednesday’s close at $46.66.

Cisco reported adjusted non-GAAP earnings per share (EPS) of $0.83 in Q4 of the latest fiscal year, slightly above analyst forecasts for $0.82 per share on the quarter. Meanwhile, the technology company’s Q4 revenue came in at $13.1 billion, above consensus analyst forecasts for $12.73 billion.

📣 Just announced – #CSCOQ4FY22 Earnings.
Q4 Revenue: $13.1B
Q4 EPS: $0.68 GAAP $0.83 non-GAAP
Q4 Cash & Investments: $19.3 billion

Read the full news release ➡️ https://t.co/wwOB0dz2c7$CSCO pic.twitter.com/LrD3IECzdG

— Cisco (@Cisco) August 17, 2022

Cisco CEO Chuck Robbins stated that “we had a strong end to our fiscal year thanks to our Q4 performance”. “Our teams executed well in the midst of an incredibly dynamic environment, resulting in the highest full-year non-GAAP earnings per share in the history of the company,” he added.

Cisco said it sees revenue growth at between 4-6% in the coming fiscal year and projected an EPS over that time period of $3.49-$3.56, above the last fiscal year’s EPS of $3.36 a share. Cisco’s revenue outlook is thus more optimistic than analysts, with the consensus bet for earnings growth of 2.2% in the upcoming fiscal year.

Dow Futures Shrug Off Upside in CSCO Shares

Futures tracking the price of the Dow Jones Industrial Average index, of which Cisco makes up about 1.0%, were unmoved in after-market trade near the 34,000 level, having dipped 0.5% on Wednesday as investors digested data showing strong core US retail sales growth in July and slightly dovish-leaning Fed minutes from its July meeting.

CSCO shares, despite their 5.0% after-market rally, continue to trade with losses of around 23% on the year, though are about 18% higher versus earlier annual lows under $41 per share. The company’s share price has been caught up in the midst of a broader US equity market rout, with inflation having this year accelerated and forced major central banks such as the Fed to aggressively raise interest rates.