Cisco Systems (CSCO) is down more than 2% after hours despite reporting fiscal first-quarter earnings that exceeded analysts’ expectations, with earnings per share surpassing estimates by $0.04, reaching $0.91. Quarterly revenue of $13.8 billion was down slightly year over year, but also came in slightly above projections. The strong Q1 performance was attributed to investments in AI infrastructure, which helped offset restructuring costs and a decrease in networking sales.
Cisco also raised its full-year revenue and earnings forecasts, indicating confidence in continued demand for AI-driven products and services. Management guided for full-year 2025 sales in the range of $55.3-$56.3 billion, compared to analysts' $55.88 billion consensus, and fiscal year earnings in the range of $3.60-$3.66 per share, on an adjusted basis, against the $3.57 consensus.
CSCO was one of many stocks to gap higher a week ago amid the post-election rally, and is now walking back those gains in late trading tonight as investors parse the Q1 earnings results. With the legacy tech giant entering the earnings confessional up 8% for the month of November already, some profit-taking seems appropriate here.
That said, a pullback in Cisco could be a buying opportunity as the company stretches its legs into AI. At 16.45x forward adjusted earnings, and with a healthy dividend yield of 2.73%, CSCO is worth considering on any dips.
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