Cisco shares surge on earnings beat and job cuts

Cisco Systems (NASDAQ:CSCO) reported better-than-expected fourth-quarter earnings and announced a restructuring plan, sending its shares up about 5% in after-hours trading.

The networking equipment giant posted adjusted earnings per share of $0.87 for the quarter ended July 27, surpassing analyst estimates of $0.85. Revenue came in at $13.6 billion, above the consensus forecast of $13.53 billion but down 10% YoY.

Cisco also revealed plans for job cuts, expecting to incur a pre-tax charge of up to $1 billion for severance and other one-time termination benefits. The company anticipates recognizing charges of about $700 million to $800 million in the first quarter of fiscal 2025.

"We delivered a strong close to fiscal 2024," said Chuck Robbins, chair and CEO of Cisco.

"In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI."

For the first quarter of fiscal 2025, Cisco forecasts revenue between $13.65 billion and $13.85 billion, with the midpoint slightly above the analyst consensus of $13.71 billion.

The company expects adjusted EPS of $0.86 to $0.88, compared to the $0.85 analyst estimate.

Cisco's full-year fiscal 2025 guidance projects revenue of $55 billion to $56.2 billion and adjusted EPS of $3.52 to $3.58, both in line with analyst expectations.

The company reported strong margins, with Q4 non-GAAP gross margin at 67.9% and fiscal 2024 non-GAAP gross margin at 67.5%, the highest in 20 years.

Cisco also declared a quarterly dividend of $0.40 per share, payable on October 23, 2024, to stockholders of record as of October 2, 2024.