Cisco earnings: Focus is on new networking-as-a-service model
Cisco Systems Inc. earnings are dependent upon how fast businesses are transitioning to the company’s new line of network switching products and the lucrative new software contracts that are connected to them, analysts say.
Cisco CSCO, -0.48% is scheduled to report fiscal third-quarter earnings on Wednesday after the close of trading.
In the spotlight will be sales of the company’s Catalyst 9000 line of network switches, which seek to gain traction with businesses that are increasing their capital infrastructure spending, along with the multiyear software contracts required to operate the switches.
Cisco Expects Another Quarter of Growth
Networking hardware company Cisco Systems (NASDAQ:CSCO) is set to report its fiscal third-quarter results after the market closes on Wednesday.
Cisco returned to revenue growth in the second quarter, ending a two-year streak of slumping sales, and it expects to produce even stronger growth during the third quarter.
What happened last time – In the second quarter, Cisco grew revenue by 2.7% year over year to $11.9 billion. That was ahead of the average analyst estimate, and the company’s strongest performance in quite some time.
Cisco’s push to grow recurring revenue from subscriptions has had a negative effect on revenue for the past few years, as sales were spread into the future. That headwind remains, but the company was finally able to offset it in the second quarter.
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