According to data provided by S & P Global Market Intelligence, shares of Cisco Systems (NASDAQ: CSCO) gained 10% in February. Although the company operates in a difficult environment, Cisco Systems ratio recent earnings give investors a reason to be optimistic.
Cisco offers under difficult conditions
The economic slowdown in emerging markets, headwinds in foreign currency, and weak business spending drag on the performance of Cisco. However, the company managed to give solid figures for the quarter ended January 23,
Total revenues for the three-month period was $ 11.8 billion, an increase of 2% annually. It was at the upper end of its forecast increased between 0% and 2%. Product sales increased 2% in the quarter, while sales services division increased by 3%.
switching activity income has been the main weakness in the report, 4% due to weak macro in the campus area. The division NGN routing situation was positive in the quarter, with revenues up 5%. sales collaboration has increased by 3%, while the data center division showed a 3% decrease in sales. Among the smaller segments, security was pretty healthy, with an increase of 11% in revenues in the quarter.
The company is looking good in terms of cash flow and profits. Operating cash flow was $ 3.9 billion in the quarter, representing an annual increase of 36%. Adjusted earnings per share was $ 0.57; an increase of 8% in the year on the back of profit margins and share buybacks that reduced the number of shares outstanding.
Cisco also announced a large increase in the dividend of 24%, increased payments of $ 0.26 per share quarterly. At current prices, this represents a dividend yield of 3.9% generous. The administration also announced an increase of $ 15 billion for its share repurchase program, bringing the repurchase authorization remaining shares $ 16.9 billion. The company promises to return 50% of the free flow of cash to shareholders annually.
To advance
Management expects normalized earnings will increase by 1% to 4% in the next quarter, investors should not expect Cisco explosive growth in the short term. Moreover, as the company continued to produce solid earnings and growing cash flows, it appears well positioned to maintain the provision of attractive returns for shareholders.
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