Shulou(Shulou.com)11/24 Report--

On the morning of November 17, Beijing time, Cisco today released the company's first-quarter financial results for fiscal year 2023. According to the report, Cisco's first-quarter net revenue was $13.6 billion, up 6% from $12.9 billion in the same period last year, and net profit was $2.7 billion, down 10% from $3 billion in the same period last year. Excluding some one-time items (not in accordance with US GAAP), Cisco's adjusted net profit for the first quarter was $3.5 billion, up 2 per cent from $3.5 billion in the same period last year.

Cisco's first-quarter revenue and adjusted earnings per share both beat Wall Street analysts' expectations and beat expectations for second-quarter and full-year revenue, sending its shares up nearly 5 per cent in after-hours trading.

Summary of results for the first quarter of fiscal 2023: in the fiscal quarter ended October 29, 2022, Cisco's net profit was $2.7 billion, down 10% from $3 billion in the same period last year. Under GAAP, Cisco's diluted earnings per share were $0.65 per share in the first quarter, down 7% from the same period last year. In the first quarter of fiscal 2022, Cisco's diluted earnings per share were $0.70.

Excluding some one-time items (not in accordance with GAAP), Cisco's adjusted net profit for the first quarter was $3.5 billion, up 2% from $3.5 billion in the same period last year, and adjusted earnings per share was $0.86. Up 5% from $0.82 in the same period last year, which exceeded analysts' expectations. On average, 21 analysts had expected Cisco's adjusted earnings per share to reach $0.84 in the first quarter, according to data compiled by Yahoo Finance.

Cisco's first-quarter net revenue was $13.6 billion, up 6% from $12.9 billion in the same period last year and exceeding analysts' expectations. On average, 18 analysts had expected Cisco's first-quarter revenue to reach $13.31 billion, according to Yahoo Finance.

Cisco's total fiscal first quarter gross margin, product gross margin and service gross margin were 61.2%, 59.2% and 67.3%, respectively, compared with 62.4%, 61.5% and 65.2% in the same period last year. Excluding some one-time items (not in accordance with US GAAP), Cisco's adjusted gross profit margin, product gross margin and service gross margin in the first quarter were 63.0%, 61.0% and 68.8%, respectively, compared with 64.5%, 63.8% and 66.5% in the same period last year. By region, the total gross profit margin of Cisco's business in the Americas, Europe, Middle East and Africa (EMEA) and Asia Pacific (APJC) was 63.0%, 63.3% and 62.3% respectively.

Cisco's operating expenses were $4.8 billion in the first quarter, up 4% from the same period last year and accounting for 35.3% of revenue. Excluding some one-time items (not in accordance with GAAP), Cisco's adjusted operating expenses for the first quarter were $4.2 billion, an increase of 5% over the same period last year, and accounted for 31.1% of revenue.

Of Cisco's total operating expenses in the first quarter, R & D expenditure was $1.781 billion, compared with $1.714 billion in the same period last year; sales and marketing expenses were $2.391 billion, compared with $2.261 billion in the same period last year; general and administrative expenses were $565 million, compared with $551 million in the same period last year. Amortization expenses for acquired intangible assets were $71 million, compared with $84 million for the same period last year, and restructuring and other expenses were-$2 million, compared with $5 million for the same period last year.

Cisco's first-quarter operating profit was $3.5 billion, an increase of 3% compared with the same period last year, with an operating margin of 26.0%. Excluding some one-time items (not in accordance with GAAP), Cisco's adjusted operating profit for the first quarter was $4.3 billion, an increase of 1% over the same period last year, and an adjusted operating profit margin of 31.8%.

The reserve income tax rate for Cisco in the first fiscal quarter is 23.2%, and the reserve income tax rate is 19.0%, which is not adjusted in accordance with GAAP.

Cisco's deferred revenue for the first quarter was $23 billion, up 4 per cent from the same period last year. Among them, product deferred revenue increased by 7% compared with the same period last year, and service deferred revenue increased by 2% compared with the same period last year.

In the first quarter of fiscal 2023, Cisco's operating cash flow was $4 billion, up 16 percent from $3.4 billion in the first quarter of fiscal 2022. The total value of cash, cash equivalents and investments held by Cisco at the end of the first quarter was $19.8 billion, compared with $19.3 billion at the end of fiscal 2022.

In the first quarter of fiscal 2023, Cisco returned a total of $2.1 billion to investors in the form of share buybacks and dividends. Of these, Cisco declared and paid a cash dividend of $0.38 per common share, with a total expenditure of $1.6 billion. In addition, Cisco repurchased a total of about 12 million common shares under its share buyback program in the first quarter, with an average repurchase price of $43.76 per share, for a total expenditure of $500m. Under the current share buyback program, Cisco can further repurchase common shares with a value of approximately $14.7 billion without maturity.

Segment results: sales of Cisco products (including routers and switches) were $10.245 billion in the first quarter of fiscal 2023, compared with $9.529 billion in the same period last year, and services sales were $3.387 billion, compared with $3.371 billion in the same period last year.

By product, Cisco's revenue from security and Agile Networks business in the first quarter was $6.684 billion, up 12% compared with the same period last year; revenue from Internet for the Future business was $1.31 billion, down 5% compared with the same period last year; revenue from cooperative business was $1.086 billion, down 2% from the same period last year Revenue from the end-to-end security business was $971 million, up 9% from the same period last year; revenue from optimized application experience was $193 million, up 7% from the same period last year; and revenue from other products was $2 million, down 47% from the same period last year.

Geographically, Cisco's revenue from the United States in the first quarter was $7.914 billion, up 5 percent from the same period last year; revenue from Europe, the Middle East, and Africa was $3.675 billion, up 11 percent from the same period last year; and revenue from the Asia-Pacific region was $2.043 billion, basically the same as the same period last year.

Performance outlook: second quarter performance outlook:

Cisco expects revenue in the second quarter of fiscal 2023 to grow by 4.5% to 6.5% compared with the same period last year, with an operating profit margin of 31.5% to 32.5% not in accordance with GAAP. The average (85 U.S. dollars) is in line with expectations for earnings per share that are not adjusted for U.S. GAAP between 84 and 86 U.S. dollars. Cisco previously reported revenue of $12.7 billion in the second quarter of fiscal 2022, meaning the company's revenue outlook for the second quarter of fiscal 2023 was between $13.27 billion and $13.53 billion, exceeding analysts' expectations.

According to data compiled by Yahoo Finance, 21 analysts had on average expected Cisco's adjusted earnings per share to reach 85 cents in the second quarter, while 18 analysts had expected Cisco's second-quarter net revenue to reach 13.24 billion dollars.

Cisco also expects earnings per share under GAAP to range from 59 cents to 64 cents in the second quarter of fiscal 2023.

Full-year performance outlook:

For the entire fiscal year 2023, Cisco expects revenue to grow by 4.5% to 6.5% over fiscal year 2022, earning between $2.63 and $2.76 per share, and between $3.51 and $3.58 per share without GAAP adjustments. The average ($3.545) fell short of analysts' expectations. Cisco previously reported revenue of $51.6 billion in fiscal 2022, which means the company's revenue outlook for fiscal 2023 is between $53.92 billion and $54.95 billion, with an average of $54.44 billion.

According to data compiled by Yahoo Finance, 25 analysts had on average expected Cisco's adjusted earnings per share for fiscal 2023 to reach $3.53, while 25 analysts had expected Cisco's net revenue for fiscal 2023 to reach $54.11 billion.

Cisco said that the company's performance outlook for the second quarter of fiscal 2023 assumes that the effective accrued income tax rate is 19% in accordance with and not in accordance with GAAP. For the full year of fiscal year 2023, it is assumed that the effective accrued income tax rate is 20% in accordance with GAAP, and 19% in accordance with GAAP.

Share price reaction: Cisco shares fell 51 cents, or 1.14 percent, to $44.39 in regular Nasdaq trading. In after-hours trading as of 04:15 EDT on the 16th (05:15 Beijing time on the 17th), Cisco shares jumped $2.12, or 4.78%, to $46.51. In the past 52 weeks, the highest price for Cisco is $64.29 and the lowest price is $38.60.

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