The stock of Cisco Systems (CSCO) is up 7% after the telecommunications equipment provider reported better-than-expected financial results for what was its fiscal first quarter.
The San Jose, California-based company reported earnings per share (EPS) of $1 U.S., which was slightly ahead of the $0.98 U.S. expected on Wall Street.
Revenue in the period totaled $14.88 billion U.S., which beat the consensus forecast of $14.77 billion U.S. Sales were up 8% from a year earlier.
The latest print marked the fourth consecutive quarter of growth for Cisco following a stretch of revenue declines.
Cisco’s networking business, its biggest operating unit, saw sales climb 15% to $7.77 billion U.S. in the latest quarter. Analysts forecast $7.47 billion U.S. of sales.
Management said Cisco is benefitting from growth in data centre spending amid the boom in artificial intelligence (A.I.).
Cisco is racing to tie itself more closely to the A.I. rally, last month introducing a new Ethernet switch based on Nvidia’s (NVDA) silicon and microchips.
Senior executives at Cisco said that A.I. infrastructure orders from mega-cap technology companies reached $1.3 billion U.S. in fiscal Q1, “reflecting a significant acceleration in growth.”
Looking ahead, Cisco said it expects revenue of $15 billion U.S. to $15.2 billion U.S. for the current quarter, topping the $14.6 billion U.S. average estimate of analysts.
Earnings are forecast to come in at $1.01 U.S. to $1.03 U.S. per share, exceeding the $0.99 U.S. average estimate of analysts.
However, while networking is growing, Cisco’s other two business units saw sales decline and miss Wall Street’s expectations in fiscal Q1.
Sales in the company’s security unit fell 2% from a year earlier to $1.98 billion U.S. and collaboration sales dropped 3% to $1.06 billion U.S.
Prior to today (Nov. 13), CSCO stock had gained 25% this year to trade at $73.96 U.S. per share.
