Cisco Systems Inc. (CSCO) announced its financial results for the first quarter that surpassed consensus estimates, helped by improved demand for its teleconferencing software and networking equipment during the pandemic. Shares of Cisco (NASDAQ: CSCO) rose more than 8 percent this morning following the results.
The company said demand for its videoconferencing platform Webex, web-based VPN client AnyConnect, and cybersecurity tools rose after the Covid-19 outbreak, which forced people to work from home, as lockdowns were imposed by the governments around the world.
Cisco reported an adjusted profit of 76 cents per share for the quarter, beating analysts’ average estimate of 70 cents per share. Revenue slipped 9 percent to $11.93 billion, though came above consensus forecast of $11.85 billion.
Revenue was partly hurt by drop in orders from its corporate clients. However, strong performance of Cisco services unit somewhat balanced the drop.
The company’s Chief Executive Officer Chuck Robbins said in a statement “Cisco is off to a solid start in fiscal 2021 and we are encouraged by the signs of improvement in our business as we continue to navigate the pandemic and other macro uncertainties.”
Looking forward, the company expects revenue in the range of $11.8 billion to $12 billion for the second quarter, better than analysts’ average estimate of $11.6 billion in revenue for the next quarter.
The company expects its adjusted gross margin to drop to 64.5 percent in the second quarter, from 65.8 percent in Q1.
Cisco (CSCO) stock has seen many ups and downs in the current fiscal year. Its share price has declined nearly 14 percent on year-to-date basis. CSCO is current trading at volume of 30 million shares, as compared to daily average volume of 25 million shares. The company has a market value of around $174.413 billion.
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