Feb. 14--SAN JOSE -- For Cisco Systems, Valentine's Day brought something better than all the flowers and chocolates that the Bay Area tech stalwart could have hoped to have gotten from Cupid: A return to sales growth.
After the close of trading Wednesday, Cisco reported fiscal second-quarter sales of $11.9 billion, a 3 percent increase from the $11.58 billion the networking equipment-maker reported a year ago. It was the first time in six quarters that Cisco reported a year-over-year increase in sales.
The results helped boost Cisco's share price by 6.4 percent, to $44.80, in after-hours trading.
The company has been putting more of its focus on software and cloud-based networking and other services. Cisco said its sales were boosted by gains of 3 percent in both products and service, and Chief Executive Chuck Robbins said Cisco's results show the company's recent efforts are paying off.
"We made continued progress in shipping more of our business to software and services," Robbins said, on a conference call to discuss Cisco's results. "We're clearly seeing the results of our strategy."
Cisco also said it lost $8.8 billion, or $1.78 a share, in the quarter that ended Jan. 27. However, those results included an $11.1 billion charge related to the recent tax cuts and jobs act. Excluding that, and other one-time items, Cisco earned $3.1 billion, or 63 cents a share. By that measure, Cisco's results topped the consensus estimates of Wall Street analysts, who had forecast the company to earn 59 cents a share on $11.81 billion in sales.
Cisco is seen as one of the barometers of business health in Silicon Valley and across the region. The company has approximately 72,000 employees worldwide, and as much as one-third of its workforce is based in San Jose and around the Bay Area.
Dan Ives, head of technology research at GBH Insights, said Cisco's results suggest the company is starting to find its footing after stumbling early on with its new emphasis on software and services
"Cisco looks to slowly be getting back on the modest growth trajectory with a software-centric approach, the key DNA in its turnaround plan," said Ives, who added that adding more software to its long-time arsenal of networking hardware is "music to ears of (Cisco's) customers and partners."
Cisco also said it expects its second-quarter sales growth to not be a one-time thing. The company forecast third-quarter revenue to grow by 3 percent to 5 percent over the $11.6 billionCisco reported a year ago. Cisco added that it sees its third-quarter earnings excluding one-time items coming in at between 64 cents and 66 cents a share, while analysts had forecast a profit of 63 cents a share.
Additionally, Cisco said it is raising its quarterly dividend payment to 33 cents a share from 29 cents, and added $25 billion to its stock buyback plan.
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