Cisco Systems Inc reported 2019Q3 total revenue rose about 4% to $12.96 billion, beating estimates of $12.89 billion. Net income rose to $3.04 billion, or 69 cents per share, in the third quarter ended April 27 from $2.69 billion, or 56 cents per share, a year earlier.
Fourth-quarter guidance was encouraging: revenue growth of 4.5% to 6.5%, and non-GAAP earnings per share of $0.80 to $0.82.
The strong sales growth was in spite of a huge 13% decline in its service provider business for the most recent fiscal quarter. They expect revenues to grow as service providers start rolling out 5G networks. This is consistent with what other carriers are saying, such as Nokia and Huawei
Cisco says that they have only minimal sales exposure to China and changes to its supply chains have helped cushion the blow of U.S.-China trade dispute. Chief Financial Officer Kelly Kramer said only about 3% of Cisco’s overall revenues come from China. With Huawei the home team in China, that is what you would expect. It also gave Cisco a good reason to shift manufacturing away from China.
“Our strong performance in the quarter was across the business, reflecting our customers’ confidence in our strategy, business model and market-leading portfolio,” said Chuck Robbins, chairman and CEO of Cisco. “Technology is at the heart of our customers’ strategies and we are building the technology to help them achieve their business objectives.”
Investors were impressed with the results. Shares in after-hours trading advanced 2.5%.
To see Cisco’s actual results, go to https://s2.q4cdn.com/951347115/files/doc_financials/2019/Q3/v1/Q3FY19-Press-Release-(2).pdf