Shares of networking titan Cisco Systems (CSCO) gained in after-hours trading after it reported strong fourth-quarter results. The company beat analyst expectations with adjusted earnings per share of $0.87 on revenue of $13.64 billion. Although revenue surpassed expectations, it still fell by 10.3% on a year-over-year basis.
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Nevertheless, CFO Scott Herren noted that demand is steady with order growth across the business. In addition, the firm saw solid growth in software and recurring metrics, as subscription revenue came in at $27.4 billion for the full year. This made up 51% of total revenue.
Looking forward to Fiscal Year 2025, Cisco anticipates a revenue range of $55 billion to $56.2 billion, which was roughly in line with the consensus estimate of $55.677 billion. Furthermore, full-year adjusted earnings are expected to land between $3.52 to $3.58 per share, also in line with the consensus of $3.55 per share.
Cisco Returns $3.6B to Shareholders
During the fourth quarter, Cisco returned over $3.6 billion to shareholders. Dividends made up $1.6 billion, or $0.40 per share, while buybacks made up the remaining $2 billion. The firm regularly repurchases its shares each quarter (as demonstrated in the image below) and has $5.2 billion remaining under its buyback plan.
Is CSCO a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CSCO stock based on six Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 12% decline in its share price over the past year, the average CSCO price target of $55.46 per share implies 21.54% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
