Cisco stock soars on earnings beat, direct revenue forecasts, and stock buybacks

Cisco Systems (CSCORevenue forecast is constantly improving despite component shortages and supply chain issues. CSCO stock rose Thursday based on January quarter earnings and revenue that beat estimates.

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The tech giant announced its fiscal second-quarter earnings after the market closed on Wednesday. Management raised its top growth guidance for fiscal 2022 from 4.5% to 6.5% to 5.5% to 6.5%. The fiscal year ends in July.

Cisco’s board of directors authorized an additional $15 billion share buyback program. The new buyback comes amid speculation that Cisco Aim to buy Splink (SPLK).

Cisco stock rose 4.1% to 56.48 in early trading on stock market today.

In the fiscal second quarter, product orders increased 33% year-over-year, marking the third consecutive quarter of 30% excess order growth. Cisco continues to raise prices amid supply chain problems.

“Software growth accelerated again despite a record $2 billion backlog and a permanent decline in licenses,” Barclays analyst Tim Long said in a report. “Cisco sees no signs of significant order withdrawals, which indicates the potential for a lasting recovery.”

For the period ended Jan. 31, Cisco’s earnings rose 6% to 84 cents per share from a year earlier, the company said. Revenue also rose 6% to $12.72 billion, including acquisitions. Analysts expected Cisco to profit 81 cents on sales of $12.66 billion.

A year ago, Cisco earnings were 79 cents per share on sales of $11.96 billion.

For the current quarter ending in April, the company expects revenue growth of 4% at the midpoint of guidance, in line with estimates.

Cisco stock trading below entry point

Heading to Cisco’s earnings report, the company has a relative strength rating of 67 out of the top 99 possible, according to IBD stock check.

CSCO stock is down 14% in 2021.

Cisco stock has shifted away from its core business of selling network switches and routers. With acquisitions, Cisco aims to increase revenue from software and services.

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