Cisco Systems, Inc. (NASDAQ: CSCO) reported its third quarter financial results after the market close on Wednesday. The Company reported better-than-expected quarterly results and provided a stronger guidance, sending shares 5.3% higher the opening bell on Thursday.
For the third quarter, Cisco reported earnings of USD 0.78 per share on revenue of USD 12.96 Billion. Refinitiv analysts expected earnings of USD 0.77 per share on revenue of USD 12.89 Billion.
Cisco’s net revenue rose by 6% year-over-year, primarily driven by the growth across its business segments. Cisco’s product revenue increased by 7% to USD 9.72 Billion, while service revenue rose by 3% year-over-year to USD 3.23 Billion.
Product revenue was mainly driven by the broad growth across Cisco’s business units. Security revenue increased by 21% to USD 707 Million during the quarter. Applications rose by 9% to USD 1.43 Billion, while Infrastructure Platforms jumped by 5% year-over-year to USD 7.54 Billion.
Cisco’s Infrastructure Platforms and Security segment edged out FactSet analysts’ revenue expectations of USD 7.46 Billion and USD 676 Million, respectively. However, the Company’s Applications segment fell behind estimates of USD 1.50 Billion.
The Company primarily saw strength in its Americas geographic region, as revenue rose by 9%. EMEA also saw stronger growth as it rose by 5%. APJC lagged behind as revenue slipped by 4% year-over-year.
"Our strong performance in the quarter was across the business, reflecting our customers' confidence in our strategy, business model and market-leading portfolio," said Chuck Robbins, Chairman and Chief Executive Officer of Cisco. "Technology is at the heart of our customers' strategies and we are building the technology to help them achieve their business objectives."
During the conference call with analysts Robbins addressed the matter of the ongoing trade war between the U.S. and China. Robbins remained optimistic and noted that it won’t affect the Company that heavily.
“We see very minimal impact this point based on all the great work the teams have done, and it is absolutely baked into our guide going forward,” Robbins said.
For the fourth quarter, Cisco is expecting revenue to grow between 4.5% to 6.5% year-over-year. Additionally, the Company expects adjusted earnings between USD 0.80 to USD 0.82 per share. Refinitiv analysts surveyed earnings of USD 0.81 per share on revenue of USD 13.29 Billion, or a 3.5% growth.