Summary
Cisco Systems, Inc. (CSCO) reported its financial results for the third quarter and first nine months of fiscal year 2018, ending April 28, 2018. The company demonstrated revenue growth, with total revenue increasing by 4% year-over-year for the quarter and 2% for the nine-month period. This growth was primarily driven by strong performance in Infrastructure Platforms, Applications, and Security product categories, alongside a consistent increase in service revenue. Despite revenue growth, gross margins saw a slight decrease due to factors like unfavorable pricing, increased memory component costs, and amortization of purchased intangibles. The company also incurred significant expenses related to restructuring and a substantial provisional tax expense of $11.1 billion due to the Tax Cuts and Jobs Act of 2017. Consequently, the company reported a net loss for the nine-month period. Cisco continued to return value to shareholders through substantial stock repurchases and dividends, demonstrating a commitment to capital return despite the impact of the Tax Act on reported earnings.
Financial Highlights
57 data points| Revenue | $12.46B |
| Cost of Revenue | $4.70B |
| Gross Profit | $7.76B |
| R&D Expenses | $1.59B |
| Operating Expenses | $4.63B |
| Operating Income | $3.13B |
| Interest Expense | $237.00M |
| Net Income | $2.69B |
| EPS (Basic) | $0.56 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 4.79B |
| Shares Outstanding (Diluted) | 4.84B |
Key Highlights
- 1Total revenue increased by 4% to $12.46 billion for the third quarter and by 2% to $36.49 billion for the first nine months of fiscal 2018.
- 2Product revenue grew by 5% in the third quarter, driven by Infrastructure Platforms, Applications, and Security, while service revenue increased by 3%.
- 3Total gross margin decreased by 0.7 percentage points to 62.3% for the quarter and by 1.0 percentage points to 62.2% for the nine months, impacted by pricing and component costs.
- 4Operating income as a percentage of revenue decreased to 25.1% for the quarter and 24.6% for the nine months.
- 5A significant provisional tax expense of $11.1 billion was recorded due to the Tax Cuts and Jobs Act, leading to a net loss of $3.7 billion for the first nine months.
- 6Cisco repurchased $11.6 billion of common stock and paid $4.4 billion in dividends during the first nine months of fiscal 2018.
- 7The company announced a definitive agreement to sell its Service Provider Video Software Solutions (SPVSS) business.