By
Chimamanda U. Martha
February 13th, 2024
Cisco has given a strong outlook for the coming fiscal year after its shares surged owing to a sound fiscal Q4 2022 report.
Cisco Systems Inc (NASDAQ: CSCO) shares jumped around 6% on Thursday after the tech giant posted better-than-expected fiscal Q4 2022 results. This positive development also marks the biggest gain for Cisco in almost two years since November 2020.
Cisco Fiscal Q4 2022 Revenue, Shares, 2023 Fiscal Year By the Numbers
On Wednesday, Cisco posted its earnings report for the fiscal fourth quarter of the year, which beat analysts’ revenue and earnings per share estimates. For revenue, the multinational tech conglomerate reported $13.1 billion. Although this represents a slight decline year over year, the latest revenue haul surpasses the $12.79 billion estimate. Furthermore, Cisco also announced that earnings per share for fiscal Q4 2022 came in at 83 cents per share, adjusted. This was also good enough to edge out the 82 cents per share analysts were expecting for the same period.
Following impressive figures, Cisco has now provided rosier guidance for the full 2023 fiscal year. For the coming year, the company called for adjusted earnings per share of $3.49 to $3.56, as well as 4% to 6% revenue growth. By comparison, analysts already had it as adjusted earnings of $3.53 per share, alongside a revenue haul of $52.79 billion, or a growth of 2.3%. This 2.3% projection already pales compared to Cisco’s 3.4% revenue increment during its 2022 fiscal year. It, therefore, comes as no surprise that some analysts have also seen their optimism grow with the company’s more robust forecast. For example, analysts at Needham wrote:
“Cisco guidance primarily reflects the existing backlog and expectations of improving parts availability as well as improved price increase realization. The improving supply is helping revenue come in above street estimates.”
In addition to their glowing take on Cisco’s operational outlook, the Needham analysts also have a hold rating on CSCO.
Cisco Thrived in Quarter due to Strong Demand, Management Says
Cisco’s management ascribed the strong quarterly performance to equally strong demand amid a volatile phase. The tech-inclined corporation has been feeling the brunt of supply chain bottlenecks owing to Covid-induced lockdowns. However, those constraints began to finally abate during the latest quarter. Speaking directly about this development, Cisco chief executive officer Chuck Robbins explained in a media session:
“We’ve been saying all along that we have a record backlog, and when the supply chain begins to ease that we would begin to see the revenues flow through. We saw some early easing in the supply chain which is positive, and we look ahead to the next year and we feel like it’s going to continue.”
In a release, Cisco chief financial officer Scott Herren spoke on the company’s revenue haul for the fiscal Q4. According to Herren, it indicates the tech giant’s spirited initiative in combating the global semiconductor shortage situation. However, analysts at JMP say that Cisco is not out of the woods yet. According to these analysts, supply chain constraints will continue to “limit growth for several quarters”.