Yahoo Finance Why Did Cisco’s Stock Rise on Fiscal 3Q16 Results?
What Drove Cisco’s Revenues in Fiscal 3Q16?
Revenue fell 1% YoY
On May 18, 2016, Cisco (CSCO) announced its fiscal 3Q16 results. It reported revenue of $12 billion, a decrease of 1% YoY (year-over-year). While product revenue rose 1%, service revenue rose 11% in fiscal 3Q16. Analysts estimated EPS of $0.55 and revenue of $12.0 billion in fiscal 3Q16. Shares of Cisco rose over 3% as earnings beat Wall Street estimates.
Product revenue was driven by 17% YoY growth in Cisco’s Security segment in fiscal 3Q16. The revenue from its SP Video and Collaboration businesses also rose 18% and 10%, respectively, in fiscal 3Q16. The revenue from Cisco’s Wireless and Data Center segments rose 1% YoY. Its Switching and NGN Routing revenue fell 3% and 5%, respectively.
Other highlights in fiscal 2Q16
On a GAAP (generally accepted accounting principles) basis, the net income was $2.3 billion with an EPS (earnings per share) of $0.46 in fiscal 3Q16. On a non-GAAP basis, the net income and EPS rose 4% and 6% YoY in fiscal 3Q16 to $2.9 billion and $0.57, respectively.
Cisco’s GAAP gross margin and product margin stood at 64.3% and 63.8%, respectively. GAAP operating expenses rose 3% YoY to $4.7 billion. The cash flow from operations rose 1% to $3.1 billion in fiscal 3Q16 from $3 billion in fiscal 3Q15.
Cisco is a market leader in the networking space. It has a market cap of $139 billion. Its main competitors include VMware (VMW), Juniper Networks (JNPR), and Europe’s (EFA) Ericsson (ERIC). These companies have market caps of $24.9 billion, $8.6 billion, and $25.4 billion, respectively.
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