The 10-second takeaway
For the quarter ended Jan. 31 (Q2), Cisco Systems met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased. GAAP earnings per share grew significantly.
Gross margins contracted, operating margins dropped, net margins increased.
Cisco Systems logged revenue of $12.10 billion. The 36 analysts polled by S&P Capital IQ expected net sales of $12.06 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.51. The 36 earnings estimates compiled by S&P Capital IQ anticipated $0.48 per share. Non-GAAP EPS of $0.51 for Q2 were 8.5% higher than the prior-year quarter's $0.47 per share. GAAP EPS of $0.59 for Q2 were 48% higher than the prior-year quarter's $0.40 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60.7%, 60 basis points worse than the prior-year quarter. Operating margin was 23.2%, 50 basis points worse than the prior-year quarter. Net margin was 26.0%, 710 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $12.20 billion. On the bottom line, the average EPS estimate is $0.49.
Next year's average estimate for revenue is $48.66 billion. The average EPS estimate is $1.99.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 10,507 members out of 11,025 rating the stock outperform, and 518 members rating it underperform. Among 1,970 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,891 give Cisco Systems a green thumbs-up, and 79 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cisco Systems is outperform, with an average price target of $22.11.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.