Cisco Systems (CSCO) has reported its fiscal 4th quarter 2011 earnings results after the bell Wednesday, and issued a positive surprise on both the top and bottom lines. Revenues for the quarter reached $11.2 billion, above the Zacks Consensus Estimate of $10.99 billion.
At Zacks, we use the adjusted earnings figures and subtract stock-based compensation. Cisco reported 35 cents per share in the quarter, beating the Zacks Consensus of 32 cents.
Guidance is not available at this hour, but Cisco’s conference call should be very informative. In a 4th quarter where the company announced last month it would be cutting 6500 jobs and cited market weakness as the main reason for the restructuring, Cisco’s shares had fallen 8% just since Monday, almost 23% over the past 3 months and were down more than 42% from its 52-week high.
Seemingly routine modest earnings beats followed by lowered guidance have helped feed this underperformance. Cisco cited an increased tax rate during its 3rd quarter lowering of guidance. Gross margin has reportedly slipped for the 4th quarter from 63.3% to 61.28%, but this comes as a shock to no one — we were all expecting Cisco to report on a difficult quarter.
Also, analysts covering the routing and services tech giant had remained dormant regarding estimate revisions throughout the quarter, with the only estimate revisions coming in over the last 90 days on the full-year side. Nevertheless, Cisco has now posted a positive earnings surprise — albeit another modest one (9.4%) — in each of the last 5 quarters.
Shares in after-market trading are up close to 7% at this hour, but take this with a grain of salt — with the extraordinary turbulence we’ve seen in the market over the past week, it’s anybody’s guess how CSCO shares will hold up in the coming trading sessions.
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