Cisco Gains 4% After Raising FY 2023 Guidance
- Cisco reported revenue of $13.6 billion and adjusted earnings of $0.86 per share.
- The company raised its full year guidance for 2023.
- Cisco stock rallied to multi-month highs.
Cisco Raises Guidance And Announces A “Limited Business Restructuring”
Cisco shares are up by 4% after the release of its fiscal first quarter report. The company reported revenue of $13.6 billion and adjusted earnings of $0.86 per share, beating analyst estimates on both earnings and revenue.
Cisco has also raised its full-year guidance. The company expects that its revenue would grow by 4.5% – 6.5% in the fiscal year 2023. Cisco also expects that its adjusted earnings would total $3.51 – $3.58 per share.
Cisco commented: “Our annualized recurring revenue increased to more than $23 billion, with product ARR growing 12%. This, together with our significant backlog, strong RPO, and easing supply situation, provides us with great visibility and predictability, and supports our increased full year guidance.”
Like many companies in recent months, Cisco announced that it would do a “limited business restructuring.” Cisco expects to eliminate about 5% of its workforce.
Traders Push Cisco Stock To Multi-Month Highs
In Cisco’s case, the market is not worried about layoffs. The company has raised its guidance, which means that layoffs are not a sign of shrinking business.
Cisco shares opened with a significant gap up and continue to trade above the $46 level, near the daily highs at $46.41.
Cisco’s report is a welcome development for the tech segment which has found itself under pressure after yesterday’s disappointing report from Micron.
Ahead of the release of Cisco’s report, analysts expected that Cisco will report earnings of $3.53 per share in 2023. The midpoint of the company’s guidance is a bit higher than this estimate, so the market’s favorable reaction is understandable.
It should be noted that Cisco stock has been volatile in recent months while analysts estimates were stable, which means that Cisco has a good chance to gain additional upside momentum when analysts adjust their estimates to reflect the recent report.
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