Shares of Cisco Systems (CSCO) rose in after-hours trading after the networking giant reported strong fourth-quarter results, with adjusted earnings per share of $0.87 and revenue of $13.64 billion, beating analysts’ expectations. Revenue beat expectations but was still down 10.3% year over year.
Still, Chief Financial Officer Scott Herren said orders are increasing across the business and demand is stable. Additionally, the company saw solid growth in software and recurring revenue, with subscription revenue reaching $27.4 billion for the year, which represented 51% of total revenue.
Cisco now expects fiscal 2025 revenue of $55 billion to $56.2 billion, roughly in line with the consensus estimate of $55.677 billion. Additionally, Cisco now expects full-year adjusted earnings to be in the range of $3.52 to $3.58 per share, also in line with the consensus estimate of $3.55 per share.
Cisco returns $100 million to shareholders
In the fourth quarter, Cisco returned over $3.6 billion to shareholders: $1.6 billion in dividends, or $0.40 per share, and the remaining $2 billion was covered by share repurchases. The company regularly buys back its own shares each quarter (see image below), leaving it with $5.2 billion remaining in its share repurchase plan.
Is CSCO a buy, sell or hold?
Turning to Wall Street, analysts have a consensus rating of Moderate Buy for CSCO stock, based on 6 Buys, 10 Holds, and 0 Sells over the past three months, as shown in the chart below: After a 12% drop in the stock price over the past year, the average price target for CSCO is $55.46 per share, indicating an upside potential of 21.54%, although it’s worth noting that expectations are likely to change following today’s earnings report.
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