Cisco climbs as Q4 results surpass estimates, plans to cut 7% of workers

Cisco Systems (NASDAQ:CSCO) climbed 6% during early post-market trading Wednesday after it reported fourth quarter fiscal 2024 financial results above estimates as its recent acquisition added nearly $1B in revenue.

The company also reported plans to reduce its global workforce by about 7%, which would equate to more than 6,300 employees.

For the quarter ended July 27, Cisco reported earnings per share of $0.87 versus the consensus estimate of $0.85. Revenue for the quarter totaled $13.64B, which was more than the estimate of $13.54B.

The recent Splunk acquisition contributed $960M to the quarter.

“In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI,” said Cisco CEO Chuck Robbins.

The San Jose-based Cisco expects first quarter fiscal 2025 earnings per share to have a mid-point of $0.87, which is just above the estimate of $0.85. First quarter revenue is projected to have a mid-point of $13.75B, which is more than the estimate of $13.71B.

The company also expects gross margin of 67.5% compared to the estimate of 67.1%.

Cisco’s full-year fiscal 2025 forecast, which runs from August 2024 through July 2025, has a mid-point of $55.6B, which is in line with the estimate.

“Cisco’s earnings results were slightly ahead of expectations and profit margins came in a fair bit above consensus,” said Seeking Alpha analyst Ian Bezek. “This was enough to cheer up traders who had been worried about a potential downside surprise given the company’s recent layoff news. That said, Cisco’s 2025 guidance is merely in-line and suggests that the industry still faces substantial near-term headwinds.”