Cisco Systems, a leading networking equipment manufacturer, reported fiscal first-quarter results that showed a smaller-than-anticipated decline compared to the previous year. This performance was bolstered by an increase in revenue from the services segment, which helped alleviate the downturn in product sales.
Adjusted earnings per share fell to $0.91 for the three months ending on October 26, a decrease from $1.11 a year prior, yet this figure surpassed the consensus estimate of $0.87 from Capital IQ. Overall revenue slipped by 6% to $13.84 billion, which was slightly better than the projected $13.77 billion. In a statement, Chief Executive Chuck Robbins emphasized the commitment of Cisco's customers to investing in critical infrastructure in light of evolving artificial intelligence technologies.
Robbins stated, "Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity." The dip in product sales, which decreased by 9% to $10.11 billion, was attributed mainly to challenges in networking and collaboration products.
Conversely, the services segment experienced a 6% growth, reaching $3.73 billion. Looking ahead, Cisco adjusted its fiscal 2025 earnings per share forecast to a range of $3.60 to $3.66, up from an earlier estimate of $3.52 to $3.58. Revenue guidance was also raised, now projected between $55.3 billion and $56.3 billion, a revision from the previous range of $55 billion to $56.2 billion.
Analysts polled by Capital IQ anticipate a normalized EPS of $3.57 and revenue of $55.95 billion. For the second quarter, Cisco expects adjusted EPS to range between $0.89 and $0.91, with revenue anticipated to fall between $13.75 billion and $13.95 billion. The consensus estimates for this period are $0.87 for EPS and $13.76 billion for revenue. Additionally, in August, the company unveiled a restructuring plan expected to impact 7% of its global workforce..