Cisco Systems Explodes in After Hours Trading

Shares of Cisco Systems were on fire in after-hours trading on Wednesday after the company reported fourth quarter results that beat expectations.

The developer and manufacturer of networking hardware topped targets for both revenue and profit for the fourth quarter and provided a first quarter sales forecast also above expectations.

For the fourth quarter, Cisco reported net income of $3.8 billion, or 81 cents a share, compared with $2.42 billion, or 48 cents a share, in the year-ago period. Adjusted earnings were 70 cents a share, and revenue jumped to $12.84 billion from $12.13 billion in the year-ago period.

“We had a very strong finish to a great year and generated our highest quarterly revenue of $12.8 billion,” Cisco Chief Executive Chuck Robbins said.

Looking ahead, the company has forecast revenue growth for the first quarter in the range of 5 to 7%. This would imply $12.86 billion at the mid point. The company forecast profit in the range of 70 to 72 cents a share. Analysts had been waiting for revenue of $12.61 billion and a profit of 69 cents a share.

“We’re seeing the returns on the investments we are making in innovation and driving the shift to more software and subscriptions,” Chief Financial Officer Kelly Kramer stated.

The company recently announced that it would be acquiring Duo Security, a cyber security provider, for $2.35 billion.

Disclaimer: We have no position in Cisco Systems, Inc. (NASDAQ: CSCO) and have not been compensated for this article.