Cisco surges on Q3 earnings beat and better-than-expected Q4 outlook
Cisco rose double digits after beating Q3 revenue and earnings estimates and giving optimistic projections due to increasing demand from the AI industry.
Shares were 13% higher in after-hours trading.
The tech company reported:
Q3 revenue of $15.8 billion (compared to analyst estimates of $15.6 billion).
Q3 adjusted earnings per share of $1.06 (estimate: $1.04).
Q4 revenue guidance between $16.7 billion and $16.9 billion (estimate: $15.8 billion).
Q4 adjusted earnings guidance of $1.16 to $1.18 (estimate: $1.07).
Management upped its outlook for expected orders from hyperscalers this fiscal year to $9 billion from $5 billion.
Shares in the company have climbed more than 60% over the past calendar year and traded at record highs this week — surpassing $100 on Wednesday afternoon — fully riding the AI infrastructure wave. All these data centers need Cisco’s networking equipment as well as more from the likes of Arista Networks and HP Enterprise, both of which are being boosted postmarket from these results.
Chuck Robbins, chair and CEO of Cisco, said:
“Cisco is well positioned as the critical infrastructure for the AI era, building on our technology leadership and customer trust, while innovating at the speed and scale that our dynamic world demands.”
While demand for Cisco’s products has been climbing, the price of memory also remains elevated — which can create tension between booming sales and pressure on profitability.
Looking toward the full year, the company updated its outlook to expect revenue ranging between $62.8 billion and $63.0 billion, ahead of analysts’ estimates of $61.1 billion.
