Summary
Cisco Systems, Inc.'s filing for the quarter ending January 27, 2018, reveals a mixed financial performance, impacted significantly by a substantial provisional tax expense related to the U.S. Tax Act. Total revenue saw a modest 3% increase year-over-year for the quarter, reaching $11.9 billion, primarily driven by growth in the Americas segment and the Security and Applications product categories. However, the company reported a net loss of $8.8 billion, largely due to an $11.1 billion provisional tax expense, which included a $9 billion U.S. transition tax on accumulated foreign earnings. For the first six months of fiscal 2018, total revenue remained flat at $24.0 billion, with a net loss of $6.4 billion, also heavily influenced by the tax-related charges. Despite the bottom-line impact from the tax reform, Cisco demonstrated solid gross margins, with product gross margin increasing slightly to 61.5% in the quarter, supported by productivity improvements and a favorable product mix. The company also generated strong operating cash flow of $7.2 billion for the first six months, underscoring operational resilience. Cisco continued its capital return strategy, repurchasing $5.6 billion of stock and paying $2.9 billion in dividends during the first half of the fiscal year, while also announcing a significant $25 billion increase to its stock repurchase authorization.
Financial Highlights
57 data points| Revenue | $11.89B |
| Cost of Revenue | $4.39B |
| Gross Profit | $7.50B |
| R&D Expenses | $1.55B |
| Operating Expenses | $4.42B |
| Operating Income | $3.07B |
| Interest Expense | $247.00M |
| Net Income | -$8.78B |
| EPS (Basic) | $-1.78 |
| EPS (Diluted) | $-1.78 |
| Shares Outstanding (Basic) | 4.92B |
| Shares Outstanding (Diluted) | 4.92B |
Key Highlights
- 1Total revenue for the quarter increased 3% to $11.9 billion, with growth in the Americas segment and Security/Applications product categories.
- 2A significant provisional tax expense of $11.1 billion related to the Tax Act resulted in a net loss of $8.8 billion for the quarter.
- 3Product gross margin improved slightly to 61.5% for the quarter, driven by productivity and favorable product mix, though offset by pricing pressures.
- 4Operating cash flow remained strong at $7.2 billion for the first six months of fiscal 2018.
- 5Cisco repurchased $5.6 billion in common stock and paid $2.9 billion in dividends during the first half of the fiscal year.
- 6The company announced a $25 billion increase to its stock repurchase program, indicating continued commitment to shareholder returns.
- 7The service provider market continues to show weakness, impacting routing product sales.