The Dow Jones Industrial Average (^DJI 0.40%) has been an interesting performer in recent years, having seen smaller gains during bullish phases but also losing less ground during 2022's bear market. Some argue that the 30 stocks in the Dow no longer accurately represent the broader market, but the gauge nevertheless draws a lot of attention from both sophisticated investors and those who don't follow stocks very often.
As more companies continue to release their latest financial results, a pair of Dow stocks stood out on Thursday morning. Cisco Systems (CSCO -0.50%) and Walmart (WMT -0.08%) told investors how their respective businesses have done recently, and their results shed some light on trends in the tech and retail sectors that could help show what the future will bring.
Cisco keeps gaining momentum
Shares of Cisco Systems were up 2% in premarket trading on Thursday morning. The networking technology provider reported its fiscal fourth-quarter financial results for the period ended July 29, and investors were generally pleased with what they saw.
Cisco's numbers were strong. Revenue in the fiscal fourth quarter climbed 16% year over year to $15.2 billion. Adjusted net income of $4.6 billion showed even sharper gains from where they were this time last year, and adjusted earnings came in at $1.14 per share, which was up 37% from year-ago levels. Operating cash flow performed notably well, with a gain of 62% to $6 billion.
CEO Chuck Robbins celebrated the end of what he called a "milestone year" for Cisco. As the executive sees it, Cisco is starting to innovate in key growth areas like artificial intelligence, network security, and cloud computing. More of Cisco's revenue is starting to come from recurring software subscription payments, and that's helping the company have more predictable streams of income and cash flow.
Favorable guidance suggests that Cisco sees itself continuing to pick up speed in fiscal 2024. The company expects full-year sales of $57 billion to $58.2 billion, with adjusted earnings of between $4.01 and $4.08 per share. Those numbers are relatively conservative compared to final fiscal 2023 figures of $57 billion and $3.89 per share respectively, but they leave plenty of room for Cisco to outperform in the near future.
Walmart follows suit
Meanwhile, shares of Walmart were down fractionally before the market opened. The department store retailer was the last of its peers to report its latest quarterly financial results, and even though the stock didn't move much, Walmart's numbers looked encouraging.
Walmart reported revenue of $161.6 billion for the fiscal second quarter ended July 28, up 5.7% year over year. Gross margin figures increased as supply chain cost pressures eased up, and the retailer benefited from less promotional markdown activity during the period. As a result, adjusted earnings came in at $1.84 per share, up 4% from year-ago levels.
Walmart highlighted some of its larger achievements. The retail giant continued to catch up on the e-commerce front, seeing a 24% gain driven in part by pickup and delivery service. In addition, Walmart kept gaining market share in the grocery category, even though sales of general merchandise weakened slightly in the U.S. market.
Investors didn't seem as pleased as one would expect from Walmart's higher guidance. The company now sees full-year fiscal 2024 revenue climbing 4% to 4.5%, with adjusted earnings coming in between $6.36 and $6.46 per share. Nevertheless, for those who had feared that a recession could crimp retail activity, Walmart is showing that things still look good in the sector.
