Cisco Stock Pulls Back Despite Q1 Beat, In-Line Guidance: Retail Stays Upbeat

Cisco Systems, Inc. ($CSCO) shares slid in premarket trading on Thursday despite a quarterly beat and fairly positive forward outlook.

San Jose, California-based Cisco reported fiscal year 2025 first-quarter non-GAAP earnings per share (EPS) of $0.91, ahead of the consensus estimate of $0.87, but lower than the year-ago quarter’s $1.11.

Revenues fell 6% year-over-year to $13.84 billion versus the $13.78-billion consensus estimate. A 9% drop in product revenue more than offset the 6% service revenue growth. Excluding contribution from Splunk, the top-line was down a steeper 14%.

Business-wise breakdown showed a 100% increase in Security revenue and a 36% increase in Observability, while Networking and Collaboration revenue fell 23% and 3%, respectively.

Cisco CEO Chuck Robbins said, “Cisco is off to a strong start to fiscal 2025.”

 "Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity."

CFP Scott Herren noted that revenue, gross margin and EPS were either at the high-end or above the guidance range.

For the second quarter, the company expects non-GAAP EPS of $0.89-$0.91 and revenue of $13.75 billion to $13.95 billion.  Analysts, on average, estimate $0.89 and $13.84 billion, respectively.  

Cisco nudged up its 2025 revenue guidance from $55 billion-$56.2 billion to $55.3 billion-$56.3 billion and also increased its non-GAAP EPS guidance from $3.52-$3.58 to $3.60-$3.66. The guidance surrounded the consensus of $55.95 billion and $3.62, respectively.

The  board declared a quarterly dividend of $0.40 per share, payable on Jan. 22, 2025, to shareholders of record as of Jan. 3, 2025.

On the Stocktwits platform, retailers were ‘extremely bullish’ on Cisco stock (92/100) and the message volume has been ‘extremely high.’

Some users of the platform were left confused regarding the negative stock reaction. One of them was looking at a move to $61/$62 on Thursday.

https://stocktwits.com/TheNew_Mr_Investor/message/592499533

Wall Street analysts were largely positive about the earnings reports, as the stock snagged a slew of price target hikes. 

In premarket trading, as of 7:47 am ET, Cisco shares fell 2.64% to $57.62.

Read Next: Super Micro Stock Woes Intensify Amid Delisting Worries But A Section Of Retailers Still Back Beleaguered AI Server Maker

For updates and corrections email newsroom@stocktwits.com 

Share

·

Add us on