Cisco Posts Upbeat Q1 Earnings, But Issues Weak Forecast

reported better-than-expected results for its fiscal first quarter on Thursday, but the company issued a weak forecast for the current quarter. The San Jose, California-based company reported quarterly net income of $2.43 billion, or $0.48 per share, versus a year-ago profit of $1.83 billion, or $0.35 per share. Excluding items, the company's adjusted earnings came in at $0.59 per share. Its revenue climbed 3.6 percent year-over-year to $12.68 billion. However, analysts were expecting a profit of $0.56 per share on revenue of $12.65 billion. Product revenue rose 4 percent in the quarter, while service revenue gained 1 percent. Revenue from Cisco's data center business surged 24 percent for the quarter. At the end of the first quarter, the company had $59.1 billion in cash and cash equivalents and investments, versus $60.4 billion at the end of fiscal 2015. For the first quarter of fiscal 2016, the company repurchased around 45 million shares of common stock for an aggregate purchase price of $1.2 billion. "Q1 was a very strong quarter. We are accelerating our ability to deliver on growth opportunities, aggressively driving our cloud business, and delivering continued strength in our deferred product revenue, as we sell more of our portfolio in software and cloud models," said Chuck Robbins, Cisco chief executive officer. Cisco expected adjusted earnings of $0.53 to $0.55 per share, on revenue growth of 0 percent to 2 percent. Analysts projected earnings of $0.56 per share. Cisco shares fell 5.13 percent to $26.42 in the after-hours trading session.