Cisco Systems Inc (NASDAQ:CSCO) stock rose 4.96% (As on February 19, 11:23:47 AM UTC-4, Source: Google Finance) after the company raised its full-year earnings forecast and delivered strong second-quarter results, indicating that spending on network infrastructure was staying resilient in the face of an economic slowdown. The company is also benefiting from the easing of pandemic-driven supply chain constraints, which plagued its business last year and resulted in significant inventory buildup. Cisco said it reduced backlog 6% sequentially, while remaining performance obligations (RPO), a metric that denotes contractual revenue that will be recognized in the future, was $31.8 billion as of January-end, compared to $30.9 billion in October. Cisco’s strong performance comes at a time of cost-cutting and restructuring across the U.S. technology sector in response to economic headwinds. Cisco had announced a nearly 5% workforce reduction in November.
CSCO in the second quarter of FY 23 has reported the adjusted earnings per share of 88 cents, beating the analysts’ estimates for the adjusted earnings per share of 86 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 7 percent to $13.59 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue by 1.18%. Total annualized recurring revenue (ARR) at $23.3 billion, up 6% year over year and product ARR up 11% year over year. Total software revenue up 10% year over year and software subscription revenue up 15% year over year. Remaining performance obligations (RPO) at $31.8 billion, up 4% year over year and product RPO up 7% year over year
Additionally, the company has declared a quarterly dividend of $0.39 per common share, a 1-cent increase or up 3%, over the previous quarter’s dividend, to be paid on April 26, 2023 to all stockholders of record as of the close of business on April 5, 2023.
For fiscal 2023, Cisco said it expects revenue growth of 9% to 10.5%, and adjusted per share earnings between $3.73 to $3.78. It had previously forecast revenue growth of 4.5% to 6.5% and earnings per share of $3.51 to $3.58.
For the third quarter of fiscal 2023, Cisco expects revenue 11% to 13% growth year over year and Non-GAAP Earnings per Share to be in the range of $0.96 to $0.98