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Cisco (CSCO) Q3 2024 Earnings Report
- Earnings per share: 88 cents adjusted vs. 82 cents expected
- Revenue: US$ 12.7 billion against US$ 12.53 billion expected
Cisco’s revenue fell about 13% year over year in the quarter ended April 27, according to a statement. This is the sharpest drop since 2009. Net income fell 41% to $1.89 billion, or 46 cents per share, from $3.21 billion, or 78 cents per share, a year earlier.
The weakening of performance is due to the installation of equipment received by customers in recent quarters, according to the statement. Cisco offered similar comments in its latest earnings report three months ago.
“We currently expect customers to complete installation of most of their inventory by the end of our fiscal year in July,” Cisco CEO Chuck Robbins said on a conference call with analysts.
Cisco’s public sector business was weaker in the US than in other regions.
We believe this has been resolved with the subsequent signing of the most recent funding from the US federal government,” said Robbins.
Network revenue, at $652 billion, fell 27%. The category, which includes data center switches, continues to represent the majority of overall revenue.
During the quarter, Cisco concluded that’s it US$28 billion acquisition of security software maker Splunk. The deal reduced Cisco’s adjusted earnings per share by a penny but provided $413 million in additional revenue.
“By closing the deal, we identified 5,000 existing Cisco customers that have the potential to become significant Splunk customers and our sales teams are already making these connections,” said Robbins.
Cisco raised its fiscal 2024 revenue guidance to a range of $53.6 billion to $53.8 billion, from $51.5 billion to $52.5 billion in February. Analysts consulted by LSEG expected US$53.14 billion.
The company lowered its full-year adjusted profit forecast. It is now between $3.69 and $3.71, compared to $3.68 to $3.74 in February. The LSEG consensus was $3.67.
Before Wednesday’s announcement, shares were down 2% in 2024, while the S&P 500 index was up 11%.
Cisco said that Gary Steele, who was CEO of Splunk, is becoming the parent company’s president of go-to-market, effective immediately. Jeff Sharritts, Cisco’s chief customer and partner officer, will leave.
This is breaking news. Please check back for updates.
TO ATTEND: Cisco CEO Chuck Robbins: $28 Billion Splunk Deal Will Be a Significant Driver of Financial Growth