Cisco Reports Flat Quarterly Sales, Guides Q4 Sales to Fall

Scott Peters
18 May, 2022
New York City

Cisco Systems Inc reported sales in the fiscal year third quarter ending in April sales were flat $12.8 billion compared to a year ago and net income increased 6% to $3 billion. 

Diluted earnings per share in the quarter increased 7% to 73 cents from a year ago. 

Revenues in the Americas rose 5%, Europe and Middle East decreased 6%, and Asia Pacific including China and Japan fell 6%.  

Sales were also impacted by one less week in the quarter which resulted in 3% of revenues increase a year ago. 

In March, the company also announced suspension of its business in Russia and Belarus which generated revenues of $200 million.  

The company also said the product backlog exceeds $15 billion. 

Total gross margin declined to 63.3% from 63.9% in the prior year's quarter and operating margin in the quarter was 28.1%.

Deferred revenues increased 7% to $22.3 billion with deferred product revenues up 13% and deferred service revenues up 2%.    

In the third quarter of fiscal 2022, the company returned $1.8 billion to stockholders through share buybacks and dividends. 

The declared and paid a cash dividend of $0.38 per common share, or $1.6 billion, and repurchased approximately 5 million shares of common stock under our stock repurchase program at an average price of $54.20 per share for an aggregate purchase price of $252 million. 

The stock repurchase program has still available $17.6 billion with no termination date. 

Guidance & Outlook 

The network systems maker guided fiscal fourth quarter revenues to decline between 1% and 5% from a year ago and earnings per share between 60 cents and 70 cents. 

In the full fiscal year 2022, revenues are expected to rise between 2% and 3% and GAAP earnings per share between $2.75 and $2.85.  

The guidance reflects 52 weeks in fiscal year 2022 compared to 53 weeks in fiscal 2021. 

Company and Stock 

Cisco Systems is headquartered in San Jose, California and employs about 80,000 people around the world. 

Cisco stock dropped 13% in after-market trading after the earnings release and prior to the release has declined 23.4% in the year-so-far at the close of regular trading hours.