Cisco Systems Reports Strong Q4 Earnings and Restructuring Plan, Shares Surge 5% - What It Means for Investors
In a surprising turn of events, Cisco Systems (NASDAQ:) has exceeded expectations with its fourth-quarter earnings report and announced a major restructuring plan, causing its shares to skyrocket by 5% in after-hours trading.
The networking equipment giant reported adjusted earnings per share of $0.87 for the quarter ending July 27, beating analyst estimates of $0.85. Despite a 10% YoY decline in revenue to $13.6 billion, Cisco's performance has been commendable.
As part of its restructuring efforts, Cisco plans to implement job cuts, which could result in a pre-tax charge of up to $1 billion. The company is expected to incur charges of $700 million to $800 million in the first quarter of fiscal 2025.
CEO Chuck Robbins expressed satisfaction with the company's performance, highlighting steady customer demand and strong order growth across all business segments.
Looking ahead, Cisco forecasts first-quarter revenue between $13.65 billion and $13.85 billion, with adjusted EPS of $0.86 to $0.88. The company's full-year fiscal 2025 guidance also aligns with analyst expectations, projecting revenue of $55 billion to $56.2 billion and adjusted EPS of $3.52 to $3.58.
Cisco's strong margins, with Q4 non-GAAP gross margin at 67.9% and fiscal 2024 gross margin at 67.5%, have been a highlight. Additionally, the company has declared a quarterly dividend of $0.40 per share, payable on October 23, 2024.
In conclusion, Cisco Systems' latest earnings report and restructuring plan have shown promising results for investors. The company's ability to exceed expectations and maintain strong financial performance bodes well for its future prospects. Investors should keep a close eye on Cisco's upcoming developments and strategic initiatives to capitalize on potential opportunities in the market.