Cisco Systems beats by $0.01, reports revs in-line; guides Q2 EPS and rev towards the high end of expectations (34.11 +0.07)
- Reports Q1 (Oct) earnings of $0.61 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.60; revenues fell 1.7% year/year to $12.14 bln vs the $12.11 bln Capital IQ Consensus, with product revenue down 3% and service revenue up 1%. 32% of total revenue was from recurring offers, up over 3 percentage points from the first quarter of fiscal 2017. Revenue by geographic segment was: Americas down 1%, EMEA down 3%, and APJC down 1%. Product revenue performance was led by Security and Applications, which increased by 8% and 6%, respectively. Infrastructure Platforms revenue decreased by 4%.
- Non-GAAP total gross margin and product gross margin were 63.7% vs. 63-64% guidance and 63.0%, respectively. The decrease in non-GAAP product gross margin compared with 64.8% in the first quarter of fiscal 2017 was primarily due to pricing and lower productivity benefits. While productivity was positive, the benefit was lower than in the prior year as productivity improvements continued to be adversely impacted by an increase in the cost of certain memory components, consistent with our expectations.
- Co issues upside guidance for Q2, sees EPS of $0.58-0.60, excluding non-recurring items, vs. $0.58 Capital IQ Consensus Estimate; sees Q2 revs of +1-3% to ~$11.70-11.93 bln vs. $11.69 bln Capital IQ Consensus; adj. GM 62.5-63.5%.