Cisco Systems, Inc. (NASDAQ: CSCO) stock rose over 3.5% on Feb 14th, 2019 (as of 10:39 am GMT-5; Source: Google finance) after the company posted better-than-expected second quarter earnings and said growth from its newer business units would continue to drive sales over the near term. As previously disclosed, CSCO had completed the divestiture of the Service Provider Video Software Solutions (SPVSS) business in the second quarter of fiscal 2019 on October 28, 2018. During the second quarter of FY 19, operating margin rate was 32.1% and non-GAAP net income was 3.3 billion, up 6%.
CSCO in the second quarter of FY 19 has reported the adjusted earnings per share of 73 cents, beating the analysts’ estimates for the adjusted earnings per share of 72 cents. The company had reported the adjusted revenue growth of 7 percent to $12.45 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $2.47 billion. Total product revenue was up 9% to 9.3 billion. Infrastructure platform grew 6%. Switching had another great quarter with double-digit growth in the campus driven by the continued ramp of the Cat 9000. Wireless also had double-digit growth, with strength of the Wave 2 offerings and Meraki. Routing declined due to weakness in service provider. CSCO also saw decline in data center servers partially offset by strength in hyper converged. Applications is up 24%, with growth across all the businesses. The company saw strong growth in unified communications, telepresence, and AppDynamics. Security was up 18% with strong performance in identity and access, advanced threat, and unified threat. Service revenue was up 1% driven by software solution support. Software subscriptions were 65% of total software revenue, up 10 points year over year.
Moreover, CSCO experienced strong momentum in Q2 with total product orders growing 8%. Looking at the geographies, America grew 7%, EMEA was up 11%, and APJC was up 6%. Total emerging markets was up 6% with BRICS plus Mexico up 2%. In the customer segment, enterprise was up 11%, commercial grew 7%, public sector was up 18%, and service provider was down 1%.
CSCO has approved a $15 billion share buyback plan and the remaining authorized amount for stock repurchases including the additional authorization is approximately $24 billion.
Cisco has declared a quarterly dividend of $0.35 per common share, a 2-cent increase or up 6% over the previous quarter’s dividend, to be paid on April 24, 2019 to all shareholders of record as of the close of business on April 5, 2019.