Investing.com - Cisco lifted its full-year guidance after reporting fiscal third-quarter results that beat Wall Street estimates, as network hardware demand continued to be supported by the artificial intelligence boom.
Cisco Systems (NASDAQ:CSCO) jumped more than 4% in premarket U.S. trading Thursday.
The group has been betting that a surge in enthusiasm around AI will bolster sales of its cloud networking gear. Corporate clients have been spending heavily to build out their AI capabilities, buoying data centers that utilize Cisco’s routers and ethernet switches.
For the three months ended on April 26, Cisco reported earnings per share of $0.96 on revenue of $14.15 billion. Analysts polled by Investing.com had anticipated earnings per share of $0.92 on revenue of $14.04 billion.
Looking ahead, the company guided for fiscal fourth-quarter adjusted earnings per share of $0.96 to $0.98, with revenue expected to come in at $14.5 billion to $14.7 billion. That topped market expectations for adjusted per-share income of $0.95 and revenue of $14.52B.
Product revenue, which accounts for the bulk of overall revenue, rose 15% in the quarter year-on-year, while services added 3%.
Gross margin rose to 65.6% in the quarter from 65.1% in the prior quarter.
For its 2025 fiscal year, the company said it expects to post adjusted per-share profit in the range of $3.77-$3.79, with revenue seen at $56.5 billion to $56.7 billion.
Cisco had previously estimated adjusted per-share income of $3.68 to $3.74 and revenues of $56 billion to $56.5 billion. CFO Scott Herren told analysts that the forecast assumes that current U.S. tariffs and exemptions stay in place until the end of an ongoing 90-day pause in July.
Herren is also set to retire from Cisco in July, the firm said. He will be replaced by current Chief Strategy Officer Mark Patterson.
In a note to clients, analysts at Wells Fargo (NYSE:WFC) upgraded their rating of the Cisco’s stock to "overweight", citing AI demand momentum and "solid order growth".
(Yasin Ebrahim contributed reporting.)