Cisco Systems, Inc. Q4 F2017 Earnings Send Shares Lower

Cisco Systems, Inc. Q4 F2017 Earnings Send Shares Lower

Cisco Systems Q4 F2017 earnings were released after closing bell tonight, and the company reported non-GAAP earnings of 61 cents per share or $3.1 billion on $12.1 billion in revenue. Wall Street had been expecting non-GAAP earnings of 61 cents per share on $12.07 billion sales for the company’s fourth fiscal quarter. When the company reported its third-quarter results, it guided for non-GAAP earnings of 60 cents to 62 cents per share and $11.88 billion to $12.13 billion in revenue.

In the same quarter a year ago, Cisco reported non-GAAP earnings of 63 cents per share or $3.2 billion on $12.64 billion in sales.

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Cisco Systems Q4 F2017 earnings

On a GAAP basis, Cisco Systems Q4 F2017 earnings fell to 48 cents per share or $2.4 billion from 56 cents per share or $2.8 billion a year ago. For the full year, Cisco reported $2.39 per share in non-GAAP earnings and $1.90 per share in GAAP earnings, compared to $2.36 per share and $2.11 per share in fiscal 2016. Full-year sales fell to $48 billion from $49.2 billion in fiscal 2016.

The company said recurring revenue amounted to 31% of total revenue, an increase of 4 points year over year. Product revenue fell 5% year over year, driven by Wireless and Security. Service revenues grew 1%. Switching revenue fell 9% year over year to $3.4 billion, while NGN Routing revenue fell 9% to $1.9 billion. Collaboration revenues fell 3% to $1.1 billion, and Data Center revenue fell 4% to $837 million. Wireless revenues grew 5% to $799 million, while Security revenue grew 3% to $558 million. Service Provider revenues fell 10% to $227 million.

Cisco Systems said Americas revenue fell 6% year over year, while sales in Europe, the Middle East and Africa fell 6%. Revenue from Asia Pacific, Japan and China rose 6% year over year.

The GAAP gross margin stood at 62.2%, while the GAAP product margin fell to 60.3% from 62.2% in last year’s fourth quarter. The company said pricing drove the decline, although improvements in productivity and product mix partially offset the negative impact from pricing. The non-GAAP gross margin was 63.7%, while the product gross margin was 61.9%. The GAAP service gross margin was 67.8%, while the non-GAAP service gross margin was 68.8%.

Cisco Systems releases outlook for fiscal 2018

For the first quarter of fiscal 2018, Cisco Systems expects revenue to fall by 3% to 1% year over year. The company expects GAAP earnings to be between 48 cents and 53 cents per share and non-GAAP earnings to be 59 cents to 61 cents per share. Cisco expects the non-GAAP gross margin to be between 63% and 64%.

After Cisco Systems Q4 F2017 earnings were released, the company’s stock declined by as much as 2.13% to $31.65 in after-hours trading.

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