Cisco reported results for its fiscal second quarter to January in line with or better than its outlook and raised its dividend and share buyback plans. Revenues rose 7 percent to USD 12.4 billion after adjusting for divestments, compared with the company's forecast of 5-7 percent growth, and EPS increased to USD 0.63 per share, better than the guidance of 56-61 cents, according Telecompaper. The net profit improved to USD 2.8 billion, compared to a loss of USD 8.8 billion a year ago when Cisco took a charge of USD 11.1 billion for the changes in US tax law. Excluding the one-time items and divestment of the service provider video business last year, net profit rose 6 percent to USD 3.3 billion, and EPS was up 16 percent to USD 0.73.
CEO Chuck Robbins said the company was "very pleased with out strong performance this quarter". Cisco proposed a 6 percent increase in the quarterly dividend to 35 cents a share and approved the repurchase of up o USD 15 billion in the company's stock. Adding to its existing programme, USD 24 billion is available for share buybacks.
Cisco said quarterly product revenue rose 9 percent, while service revenue was up just 1 percent from a year earlier. Growth was strongest in the EMEA region at 8 percent, followed by 7 percent revenue growth in the Americas and 5 percent in APJC. Product revenue performance was broad based, Cisco said, with growth in Applications (+24%), Security (+18%) and Infrastructure Platforms (+6%). The gross margin was down slightly, to 62.5 percent from 63.1 percent a year ago.
For fiscal Q3, Cisco forecast revenue growth of 4-6 percent, an adjusted gross margin of 64-65 percent and EPS of USD 0.63-0.68.
