Cisco Systems Inc. forecast revenue and earnings above Wall Street expectations as demand from government and enterprises for its network equipment remained resilient despite global economic troubles.
Analysts had expected conservative quarterly guidance, given the economic uncertainty.
The world’s biggest networking equipment maker projected a 7 to 8 per cent rise in fiscal second-quarter sales, translating to $11.13-billion (U.S.) to $11.2-billion in revenue – matching or slightly ahead of the $11.14-billion expected, on average.
Excluding items, Cisco predicted earnings per share of 42 to 44 cents in the quarter, beating the average forecast of 42 cents, signalling its months-long turnaround was bearing fruit.
But chief executive officer John Chambers, who kicked off a months-long overhaul of the company to save $1-billion through layoffs and asset sales, warned that global uncertainty persists and it remains tough to predict market conditions.
“This report reflects solid execution by the company in a very challenging market environment,” Ticonderoga Securities analyst Brian White wrote in a client note.
Cisco’s shares extended gains after Chambers’ comments, rising 4 per cent to $18.30 in extended trade, after closing down 3.8 per cent.
On Wednesday, Cisco reported quarterly earnings per share that beat estimates.
The company reported adjusted earnings of 43 cents per share for the fiscal first quarter ended Oct. 29, compared with the average analyst forecast of 39 cents, according to Thomson Reuters I/B/E/S.
Revenue rose to $11.3-billion from $10.75-billion a year earlier, against the average forecast of $11.03-billion.
“We weren’t expecting fireworks for this quarter. I knew the company would control costs efficiently and there’s a little bit of revenue upside,” BGC analyst Colin Gillis.