Cisco Profit Heads Higher Despite Coronavirus Pandemic

Cisco Systems Inc. reported its third quarter financial results on Wednesday and shares went soaring about 3% in after-hours trading as a result.

Despite sales declining amid the coronavirus pandemic, the company has still seen profits head higher. The maker of network services, videoconferencing tools and security software reported net income of $2.8 billion, or 65 cents a share for the quarter.

Revenue declined 8% to $12 billion from $12.96 billion in the year-ago period. After adjusting for stock compensation and other effects, Cisco reported earnings of 79 cents a share, up a penny from the 78 cents a share a year ago.

Analysts surveyed by FactSet were expecting adjusted earnings of 71 cents a share on revenue of $11.9 billion on average. Analysts had previously expected adjusted earnings of 80 cents a share on sales of $12.7 billion at the end of 2019.

“The pandemic has driven organizations across the globe to digitize their operations and support remote workforces at a faster speed and greater scale than ever before. We remain focused on providing the technology and solutions our customers need to accelerate their digital organizations,” Cisco Chief Executive Chuck Robbins said.

More than 95% of Cisco’s 75,900 employees are working from home, added Robbins.

In a conference call with analysts Wednesday afternoon, Robbins referred to the current economic landscape as “the greatest financial crisis in our lifetime.”

“We believe we will surface from this crisis better than before,” he said.

“We were at the epicenter of the [dot-com] bubble 20 years ago,” Robbins said later. “This one is more secondary collateral damage. This is broad-based … at a level we have never seen before.”

Looking ahead towards the fiscal fourth quarter, Cisco expects revenue decreases to continue, guiding for a year-over-year sales decline of 8.5% to 11.5% after hitting more than $13 billion in revenue in the year-ago quarter. Analysts on average expected fourth-quarter revenue of $12.07 billion.

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