Second quarter results for Cisco show an increase in revenue for the company, its first rise in over two years.
The results show Cisco’s second-quarter revenue totals at $11.9bn, up 3% and narrowly beating expectations of analysts that predicted $11.8bn. However, a net loss of $8.8bn equating to $1.78 per share was reported in the earnings. In comparison, the same quarter the previous year Cisco posted a profit of $2.3 billion, or 47 cents per share.
Cash and investments were also higher than the previous quarter. Cisco said that the second quarter cash and investments closed at $73.7bn, compared to $71.6bn at the end of the first quarter of fiscal 2018. Cisco has also reported dividend values are up 14% over the previous quarter, reporting a quarterly dividend of $0.33 per common share.
The board of director’s at Cisco have also raised its stock repurchase program to $25bn, taking the total to about $31bn. Additionally, the company said it plans to bring back $67bn of funds held overseas in the third quarter of fiscal 2018, by taking advantage of the recent changes to the US tax laws.
“We had a great quarter which demonstrates that our strategy is working. Our business is growing, we have a fantastic innovation pipeline, our balance sheet is strong and we have a team that’s executing incredibly well,” said Chuck Robbins, Chairman and CEO, Cisco. “The network is more critical to business success than ever, and our new intent-based networking portfolio has great momentum including the fastest ramping new product in our history.”
After a drop in demand for its traditional switches and routers business from telecom carriers, Cisco has been making a move to software and subscription focused model. These two areas have brought significant deferred revenue to the Cloud company, which closed at $18.8bn increasing 10% in total. Deferred product revenue rose by 19%, which Cisco put down largely to subscription-based and software offers.
“Q2 was a great quarter with 3% revenue growth and strong margins and cash flow,” said Kelly Kramer, CFO of Cisco. “We continue to make progress as we shift the business toward more software and recurring revenue. Our significant dividend increase and additional share repurchase authorization reinforce our commitment to returning capital to our shareholders and show confidence in the strength of our on-going cash flows.”
Following the success in the second quarter, the company also forecasts a positive outlook for the next quarter. Cisco has finalised its acquisition of BroadSoft and also plans to acquire Skyport Systems, which both closed in the third quarter of Fiscal 2018.