Cisco beats estimates, boosts buyback program by US$25 billion

Cisco beats estimates, boosts buyback program by US$25 billion

Network gear maker Cisco Systems Inc posted a net loss on Wednesday due to an US$11.1 billion charge related to recent changes to the U.S. tax law.

FILE PHOTO: Newly installed phone made by Cisco
FILE PHOTO: A newly installed phone made by Cisco is shown in San Diego, California, U.S., April 17, 2017. REUTERS/Mike Blake/File Photo

REUTERS: Cisco Systems Inc reported its first rise in quarterly revenue in more than two years, which also topped analysts' estimates, as the network gear maker's years-long efforts to transition to a software-focused company begins to take hold.

Shares of the Dow component rose 5.3 percent to US$44.34 in after-market trading on Wednesday.

The company said its board raised its buyback program by US$25 billion.

Revenue from its infrastructure platforms category, which includes switching, routing and data center businesses, rose 2 percent to US$6.7 billion, beating analysts' estimate of US$6.6 billion, according to Thomson Reuters I/B/E/S.

Revenue from Cisco's security business, which offers firewall protection and breach detection systems, rose 6 percent to US$558 million, but missed analysts' average estimate of US$589.5 million.

The world's largest network gear maker forecast third-quarter adjusted profit between 64 cents and 66 cents per share, compared with analysts' estimate of 63 cents per share.

The company posted a net loss of US$8.8 billion, or US$1.78 per share, in the second quarter ended Jan. 27, compared with a profit of US$2.3 billion, or 47 cents per share, a year earlier.

The loss was due to an US$11.1 billion charge related to the recent changes to the U.S. tax law.

Excluding items, the company earned 63 cents per share.

Revenue rose 2.7 percent to US$11.9 billion.

Analysts on average had expected Cisco to report a profit of 59 cents per share and revenue of US$11.8 billion.

(Reporting by Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila)

Source: Reuters

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