Cisco (CSCO) shares fell nearly 4% in extended trading on Wednesday even as the networking giant posted fourth-quarter results and guidance that topped Wall Street’s forecast.
For the period ending Jan. 24, Cisco said it earned an adjusted $1.02 per share as revenue rose 10% year-over-year to $15.35B. Service revenue came in at $3.71B, down 1% year-over-year, while product revenue rose 14% from the year-ago quarter to come in at $11.64B for the period. Adjusted gross margin came in at 67.5% for the period.
Analysts had expected adjusted earnings of $1.02 per share on $15.11B in sales.
Cisco said it ended the period with $43.4B in remaining performance obligations, up 5% year-over-year.
“Cisco’s strong second quarter and first half of fiscal 2026 demonstrate both the power of our portfolio and the fundamental role we continue to play in connecting and protecting customers in a rapidly evolving landscape,” said Chuck Robbins, chair and CEO of Cisco, in a statement. “With over 40 years of customer trust, global scale, and a relentless focus on innovation, we believe Cisco is uniquely positioned to deliver the trusted infrastructure needed to securely and confidently power the AI-era.”
Looking to the third-quarter, Cisco said it expects sales to be between $15.4B and $15.6B, above the $15.2B analysts were expecting. Adjusted earnings are forecast to be between $1.02 and $1.04 per share, above the $1.03 per share estimate. Adjusted gross margins are forecast to be between 65.5% and 66.5%.
For the full-year, Cisco said it expects adjusted earnings to be between $4.13 and $4.17 per share, with the midpoint above the $4.13 per share estimate. Sales are expected to be between $61.2B and $61.7B, above the estimate of $60.76B.
Following Cisco’s results, competitor Arista Networks (ANET) fell in sympathy.
Cisco also upped its quarterly dividend to $0.42 per share.
The company will host a conference call at 4:30 p.m. EST to discuss the results.