U.S. Stock Earnings | Cisco's Guidance Beats Expectations, Stock Rose as Much as 18% After Hours

Network equipment manufacturer Cisco (CISCO) announced that its third-quarter operating revenue reached $15.8 billion, beating analysts' expectations of $15.57 billion; adjusted earnings per share (EPS) were $1.06, also surpassing analysts' estimates of $1.04.

Cisco's stock price rose by 18% during extended trading after Wednesday's market close, and closed the day up 2.6%.

During the period, product operating revenue was $12.12 billion, exceeding analysts' expectations of $11.79 billion; service revenue was $3.72 billion, below market forecasts of $3.78 billion. Gross margin was reported at 66%, compared to analysts' expectation of 66.2%. Remaining debt was $43.46 billion, with analysts estimating $43.27 billion. The group announced a restructuring plan to cut fewer than 4,000 jobs, representing less than 5% of total employees, with pre-tax GAAP income increasing by $1 billion.

Cisco expects that orders for AI infrastructure from hyperscalers in the 2026 fiscal year will reach as high as $9 billion. The group anticipates that operating revenue for the fourth quarter will be between $16.7 billion and $16.9 billion, better than analysts' forecast of $15.82 billion; adjusted EPS is expected to be between $1.16 and $1.18, also outperforming market estimates of $1.07; the estimated fourth-quarter adjusted gross margin is between 65.5% and 66.5%, compared to analysts' expectation of 66.6%.

Cisco also forecasts that full-year operating revenue will be between $62.8 billion and $63 billion, compared to the company's original estimate of $61.2 billion to $61.7 billion; it expects that $9 billion of full-year orders will come from hyperscalers, up from the previous estimate of $5 billion, with orders so far reaching $5.3 billion in this area; the company projects full-year adjusted EPS to be between $4.27 and $4.29, compared to analysts' expectation of $4.16.