Autodesk’s Herren named new CFO
Cisco Systems Inc. shares surged in the extended session Thursday after the maker of network services, videoconferencing tools and security software’s quarterly results and outlook topped Wall Street estimates, and it announced a new chief financial officer.
Cisco CSCO, -1.67% reported fiscal first-quarter net income of $2.17 billion, or 51 cents a share, compared with $2.93 billion, or 68 cents a share, in the year-ago period. Adjusted earnings were 76 cents a share, compared with 84 cents a share in the year-ago period.
Revenue declined to $11.93 billion from $13.16 billion in the year-ago quarter, marking the fourth quarter in a row Cisco has reported a year-over-year decline in revenue. Security sales helped make up for deficiencies in infrastructure sales.
Analysts surveyed by FactSet had forecast earnings of 70 cents a share on revenue of $11.85 billion, following Cisco’s forecast of 69 cents to 71 cents a share on revenue of $11.71 billion to $11.97 billion.
Shares rallied as much as 8% after hours, and will add about $13 billion in market cap if the stock performs at those levels when it opens Friday. Shares declined 1.7% in the regular session to close at $38.67, for a market cap of $163.23 billion.
For the first quarter, infrastructure sales declined 16% to $6.34 billion and applications sales fell 8% to $1.38 billion, but security sales rose 6% to $861 million from the year-ago period. Analysts had forecast infrastructure sales of $6.45 billion, applications sales of $1.4 billion and security sales of $855.8 million.
On the analyst call, Chuck Robbins, Cisco chairman and chief executive, sounded a lot more optimistic going forward than he did in the earnings call three months ago.
“When we did the last earnings call, we had seen actually good demand in the first couple weeks of the quarter, but clearly it was a couple weeks and so it was not anything that would have given us a trend, but the quarter started and it stayed, it was very linear,” Robbins told analysts.
Cisco expects earnings of 74 cents to 76 cents a share on revenue of $11.36 billion to $12.01 billion for the fiscal second quarter. Analysts had forecast 73 cents a share on revenue of $11.6 billion for the quarter.
Cisco also appointed R. Scott Herren as its new CFO effective Dec. 18.
“Most recently Scott served as the CFO for Autodesk ADSK, -0.43% and brings an incredible background in software and helped lead Autodesk’s successful business model transformation from perpetual licenses to SaaS and subscription software,” Robbins said on the call.
In its last earnings report, Cisco announced that CFO Kelly Kramer will retire from the company once a replacement is found and that it would undergo a $1 billion cost reduction “over the next few quarters.”
Cisco reported $602 million in “restructuring and other charges” in the fiscal first quarter, and said it expects another $298 million to be reported in the second quarter. Cisco did not comment on the call as to how many of its last-reported 77,500 employees were affected by layoffs.
For the year, Cisco shares are down about 20%, compared with a 1.9% advance in the Dow Jones Industrial Average DJIA, -1.08%, of which Cisco is a component, a 9% rise by the S&P 500 index SPX, -0.99% and a 30% gain by the tech-heavy Nasdaq Composite Index COMP, -0.65%.