Cisco Gives Strong Revenue Forecast as Customers Upgrade Gear

Technology giant Cisco Systems Inc. issued a strong revenue forecast on Wednesday, boosted by increased demand for its networking gear as customers upgrade their networks to handle rising traffic.

The San Jose, California-based company said it expects revenue in the current quarter to be between $13.31 billion and $13.51 billion, above analysts' average estimate of $13.28 billion, according to Refinitiv data.

For the fiscal fourth quarter ended July 30, Cisco reported revenue of $13.1 billion, up 1% year-over-year and in line with analysts' expectations.

The company's net income fell to $2.8 billion, or 68 cents per share, from $3.4 billion, or 82 cents per share, a year earlier.

Excluding items, Cisco earned 83 cents per share, beating the average analyst estimate of 80 cents per share.

Cisco shares rose 5% to $52.20 in after-hours trading.

The company said its product revenue rose 2% to $10.6 billion, while service revenue declined 1% to $2.5 billion.

Cisco's revenue from the Americas increased by 3% to $6.5 billion, while revenue from Europe, the Middle East, and Africa (EMEA) increased by 1% to $4 billion. Revenue from Asia Pacific, Japan, and China (APJC) declined by 2% to $2.6 billion.

The company said it expects its non-GAAP gross margin to be between 64% and 65% in the current quarter, and its non-GAAP operating margin to be between 32% and 33%.

Cisco also announced that it has authorized a new $15 billion share repurchase program.

"We are pleased with our Q4 performance, which reflects the continued strength and resilience of our business," said Chuck Robbins, Cisco's chairman and CEO. "Our customers are investing in their networks to support the growing demand for bandwidth and the increasing adoption of cloud and mobile applications."

"We are confident in our ability to continue to execute our strategy and deliver long-term value for our shareholders."