Summary
Cisco Systems, Inc. (CSCO) reported its first quarter fiscal year 2017 results, ending October 29, 2016. The company experienced a 2.6% year-over-year decline in total revenue, reaching $12.35 billion. This decrease was primarily driven by a 5.5% drop in product revenue, largely attributed to the sale of the Service Provider Video CPE Business and ongoing weakness in product revenue from Switching and Service Provider Video categories. However, Service revenue saw a robust 7.5% increase, signaling a positive trend in Cisco's recurring revenue streams. Despite the top-line revenue decrease, gross margin improved by 2.0 percentage points to 63.8%, attributed to productivity gains and the divestiture of lower-margin products. Net income decreased by 4.4% to $2.32 billion, resulting in diluted earnings per share of $0.46, down from $0.48 in the prior year. The company continued its capital return program, paying $1.3 billion in dividends and repurchasing $1.0 billion in common stock.
Financial Highlights
58 data points| Revenue | $12.35B |
| Cost of Revenue | $4.47B |
| Gross Profit | $7.88B |
| R&D Expenses | $1.54B |
| Operating Expenses | $5.01B |
| Operating Income | $2.88B |
| Interest Expense | $198.00M |
| Net Income | $2.32B |
| EPS (Basic) | $0.46 |
| EPS (Diluted) | $0.46 |
| Shares Outstanding (Basic) | 5.03B |
| Shares Outstanding (Diluted) | 5.07B |
Key Highlights
- 1Total revenue decreased by 2.6% to $12.35 billion.
- 2Product revenue declined 5.5%, while Service revenue grew 7.5%.
- 3Gross margin improved to 63.8% due to productivity gains and the divestiture of lower-margin business.
- 4Net income decreased by 4.4% to $2.32 billion, with diluted EPS at $0.46.
- 5The company announced a restructuring plan impacting up to 5,500 employees.
- 6Cash provided by operating activities was $2.73 billion.
- 7Total debt increased significantly due to new senior note issuances totaling $6.25 billion.