Cisco (CSCO) earnings Q4 2021

Cisco’s Chairman and CEO Chuck Robbins.

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Cisco shares fell slightly in expanded trading on Wednesday after the network hardware company reported gains that exceeded analysts’ expectations.

This is how the company did it:

  • Merits: 84 cents per share, adjusted, compared to 82 cents per share, as analysts expected, according to Refinitiv.
  • Revenue: $ 13.13 billion versus $ 13.03 billion as analysts expected, Refinitiv said.

Revenue increased about 8% year over year for the fourth quarter of the fiscal year that ended July 31, according to a statement. In the previous quarter, annual sales increased by almost 7%. The gross margin decreased from 63.9% in the previous quarter to 63.6%.

“Looking ahead, we expect the delivery challenges and cost implications to continue at least into the first half of our fiscal year and possibly into the second half,” CEO Chuck Robbins told analysts on a conference call. In May, Cisco indicated that it could face delivery bottlenecks at least until the end of 2021.

The company increased the prices of some products on August 7th due to the supply environment, said Scott Herren, CFO of Cisco. Cisco is reaching out to brokers for additional quotation and sometimes reaching out to second sources, which drives up costs, and will continue to consider whether to adjust prices further, he said.

The Infrastructure Platforms segment, which accounts for the majority of Cisco’s revenue, had sales of $ 7.55 billion. That’s a 13% year-over-year increase and more than the $ 7.11 billion analysts were expecting, according to StreetAccount. The segment includes the sale of Ethernet switches and routers for data centers.

Cisco’s applications segment, which includes sales of Webex video calling products, had sales of $ 1.34 billion. That’s a 1% decrease and is below the StreetAccount analyst consensus of $ 1.46 billion.

Security revenue was $ 823 million, up 1%, but fell short of the consensus of $ 904.7 million.

In the quarter, Cisco acquired the startups Kenna Security and Socio Labs, which manufacture event software. Conditions were not disclosed.

Regarding the forecast, Cisco said its adjusted fiscal first quarter will be 79 to 81 cents and revenue growth of 7.5% to 9.5%. Analysts surveyed by Refinitiv had expected adjusted earnings per share of 81 cents on sales of $ 12.84 billion, representing sales growth of 7.7%.

The company’s adjusted gross margin is expected to decrease to about 63.8% in the first fiscal quarter from 65.5% in the fourth fiscal quarter due to additional costs associated with supply constraints, Herren said.

In a break with tradition, Cisco has also issued guidance for fiscal year 2022. It called for adjusted earnings per share of $ 3.38 to $ 3.45 and revenue growth of 5 to 7%. Analysts surveyed by Refinitiv had expected adjusted earnings of $ 3.41 per share, along with revenue of $ 51.91 billion, representing a growth of 4%.

Without the movement after close of business, Cisco stock has risen around 24% since the beginning of the calendar year, putting it after the 30% increase in the S&P 500 index in the same period.

This is the latest news. Please check again for updates.

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