Cisco Stock Fell over 3.5% after Third-Quarter Earnings
Cisco reported revenue of $12.5 billion in the fiscal third quarter
Cisco Systems (CSCO) announced its fiscal Q3 results on May 16. It reported revenue of $12.5 billion, a rise of 4% YoY (year-over-year). Non-GAAP (generally accepted accounting principles) EPS (earnings per share) rose 10% to $0.66 with an operating margin of 31.5%. Net income rose 5.6% YoY to $3.2 billion during the quarter, up from $3.0 billion in the corresponding quarter last year. Cisco reported a gross margin of 63.9% in the third quarter compared to 64.7% in the second quarter and 64.4% in Q3 of 2017. The operating margin was 31.5% in the third quarter compared to 32.3% in Q3 2017.
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Analysts expected revenue of $12.4 billion
Analysts expected Cisco to post third-quarter revenue of $12.4 billion with non-GAAP (generally accepted accounting principles) EPS of $0.65. Cisco managed to beat revenue and earnings estimates during the quarter.
So why did Cisco stock fall despite the earnings beat? During the earnings call, Cisco stated that there is still work left to be done in the transition towards a software-focused business. Cisco also forecasted EPS between $0.68 and $0.70 compared to analyst estimates of $0.69.