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Cisco Stock Falls After Hours as Services Revenue Miss Overshadows Record Fourth-Quarter Results

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Cisco Stock Falls After Hours as Services Revenue Miss Overshadows Record Fourth-Quarter Results

Cisco Systems' (CSCO) shares dropped after the closing bell Wednesday as the company's fiscal fourth-quarter services revenue missed Wall Street's estimates, overshadowing what the networking equipment maker described as record results.

Services revenue was flat year-over-year at $3.79 billion, falling short of the FactSet-polled consensus view of $3.81 billion. Product sales climbed 24% to $13.46 billion, exceeding expectations of $13.04 billion.

Cisco shares declined 3.9% in after-hours trading. The stock is up nearly 61% this year as of Wednesday close.

For the quarter ended July 25, Cisco's adjusted earnings per share increased to $1.22 from $0.99 a year ago, topping the Street's $1.17 view. Overall revenue jumped 18% to $17.25 billion, ahead of the $16.84 billion modeled by analysts.

"In (the fourth quarter), we delivered record revenue, non-GAAP operating income and EPS, all exceeding the high end of our guidance ranges and demonstrating strong financial discipline and operating leverage," Chief Financial Officer Mark Patterson said in a statement.

Cisco forecasts adjusted EPS between $1.32 and $1.34 for the fiscal first quarter, while revenue is pegged at $18 billion to $18.2 billion. The Street is looking for non-GAAP EPS of $1.16 and sales of $16.83 billion.

For fiscal 2027, the company projects adjusted EPS of $5.05 to $5.11, compared with analysts' estimate of $4.83. The revenue guidance ranges from $72.2 billion to $73.4 billion versus the market's $69.12 billion view.

The company acquired observability firm Galileo Technologies and non-human identity security provider Astrix Securities in the fiscal fourth quarter.

Networking company Arista Networks (ANET) reported stronger-than-expected second-quarter results last week and laid out a strong third-quarter outlook.

Hewlett Packard Enterprise (HPE), which offers servers and networking products to power artificial intelligence applications, is scheduled to report fiscal third-quarter results in September.

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