Cisco Systems Earnings: Exceeds Forecasts, Yet Investors Take Profits

S&P 500 (NYSE:SPY) component Cisco Systems Inc. (NASDAQ:CSCO) reported net income above Wall Street’s expectations for the third quarter. Cisco Systems is a multinational corporation engaged in the design, manufacturing, and sales of Internet Protocol-based consumer electronics, networking, and other services related to communications and information technology.

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Cisco Systems Earnings Cheat Sheet for the Third Quarter

Results: Net income for the computer networks rose to $2.17 billion (40 cents per share) vs. $1.81 billion (33 cents per share) in the same quarter a year earlier. This marks a rise of 19.8% from the year-earlier quarter.

Revenue: Rose 6.8% to $11.6 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cisco Systems Inc. reported adjusted net income of 48 cents per share. By that measure, the company beat the mean estimate of 41 cents per share. Analysts were expecting revenue of $11.58 billion.

Quoting Management: “We delivered solid results this quarter with record revenue and non-GAAP earnings per share,” said John Chambers, Cisco chairman and CEO. “We are successfully executing against our long-term strategic plan of growing profit faster than revenue, and in a cautious IT spending environment, we continue to outperform our competitors.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 5 cents in the second quarter, by 4 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 10.8% to $11.53 billion in the second quarter. The figure rose 4.7% in the first quarter from the year earlier and climbed 3.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income rise for two consecutive quarters. In the second quarter, net income rose 43.5% from the year earlier.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 43 cents per share, up from 42 cents ninety days ago. The average estimate for the fiscal year is $1.64 per share, a rise from $1.58 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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