Cisco Systems, Inc. (NASDAQ:CSCO) reported better than expected fiscal third quarter results on Wednesday, sending the stock up by more than 7%. The San Jose-based company posted 51 cents in adjusted earnings on revenues of $11.5 billion. Analysts polled by Thomson Reuters were expecting Cisco to earn 48 cents a share with $11.36 billion in revenues.

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Cisco issues solid fiscal Q4 guidance

Following impressive quarterly results, Sterne Agee analysts Alex Kurtz, Amelia Harris and Craig Jones raised their price target on the stock from $25 to $26. Cisco Systems, Inc. (NASDAQ:CSCO) said its cash flow from operations came in at $3.2 billion, up from $2.9 billion in the previous quarter. The networking equipment maker exited the quarter with $50.5 billion in cash.

Sterne Agee said strong growth in bookings and backlog led to solid U.S. enterprise and commercial results. And that’s the reason Cisco Systems, Inc. (NASDAQ:CSCO) forecast its Q4 revenues to jump 4%-6% sequentially, beating the seasonality and well above the consensus estimate of 4% QoQ growth. Over the past five years, Cisco’s fourth quarter revenues have registered a growth of just 2% QoQ due to seasonality.

A 7% increase in Cisco Systems, Inc. (NASDAQ:CSCO)’s U.S. orders highlights the company’s ability to execute in the data center business, which witnessed a 29% YoY growth in the latest quarter. It was the 17th consecutive quarter that Cisco increased its market share in the data center business. Analysts believe that effective execution in data center may help investors buy into John Chambers’ long-term strategy of cloud, SDN and Tier 0 Storage.

Cisco still struggling in emerging markets

Cisco Systems, Inc. (NASDAQ:CSCO)’s third quarter gross margins came in at 62.7%, above the consensus estimate of 61.3% and the company’s guidance of 61%-62%. U.S. enterprise and commercial business increased more than 10% YoY. The number of enterprise deals above $1 million rose 25% during the quarter, while deals above $5 million jumped more than 50%.

However, Cisco Systems, Inc. (NASDAQ:CSCO)’s business in emerging markets continues to struggle. Orders from all emerging markets were down 7% YoY. Service Provider orders plunged 5% during the quarter, driven largely by Service Provider video vertical, which witnessed a 26% decline in orders.

Cisco Systems, Inc. (NASDAQ:CSCO) shares soared 6.73% to $24.34 at 2:46 PM EDT on Thursday.