Cisco Beats, Shares Up Big - Analyst Blog

Networking giant Cisco Systems CSCO reported earnings after the bell Wednesday, and as per normal, beat sales and earnings projections moderately. Revenues of $11.55 billion in Cisco's fiscal Q3 beat the Zacks Consensus Estimate of $11.34 billion, with earnings of 46 cents per share (actual, on a GAAP basis) topping our expectations of 43 cents.

As indicated, there's not much new going on in the results for Cisco these days -- nor has there been in awhile. Today's earnings numbers mark the fifth straight positive earnings surprise for Cisco, albeit in a similar tepid, incremental sort.

Then again, Cisco is so huge and trying to adjust to the modern marketplace on so many levels, they in some ways truly do resemble an aircraft carrier being turned around on the ocean. And with long-time CEO John Chambers keeping the progress slow and steady from the lower-margin "old tech" of switchers and routers to building out into the Intercloud and data center initiatives, that Cisco is indeed making incremental progress and surprising regularly to the upside is helping CSCO shares climb high in the after-market.

That said, most of this building out still has pretty long time horizons: Cisco's role in the "Internet of Everything," largely concerning the company's Intercloud development, along with things like its Visual Networking Index, are projected out four or even 10 years, in some cases. Not that anyone really expects the next generation of IT to amount to a flip of the switch, but certainly things like this have kept Cisco from being considered one of the "sexy" players in tech for awhile now. Then again, much the same can be said for Cisco's main rivals, IBM IBM and Oracle ORCL.

But Cisco did pay out a 19-cent per share dividend and bought back 90 million shares in the quarter, folding nicely into investors' recent sentiments about finding nice, secure equities with an income yield. To wit, CSCO shares are up around 8% in the past year, but more than 7 1/2% in after-hours trading.