Cisco’s Q4 Results Show Company Well-Positioned for AI Opportunities

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) shares rose in early Thursday trading after the IT networking company provided positive updates on the earnings call. The stock initially fell in after-hours Wednesday after the company’s FQ4 results and guidance failed to entice investors.

Region-wise, the company witnessed the strongest growth in the Americas region, which also yielded gross margins of 65%. Overall, Cisco reported a total gross margin of 65.9%, which marks a 260-basis points expansion compared to the year-ago period. The adjusted operating margin stood at 35.4%, topping the consensus by 70 bps.

Following solid results, Cisco has declared a quarterly dividend of $0.39 per common share to be paid on October 25 to all stockholders of record as of the close of business on October 4. For FY24, Cisco expects EPS in the range of $4.01-4.08 on revenue of $57-58.2 billion, which compares to the analyst consensus for adjusted earnings of $4.05 per share on revenue of $58.3 billion.While Cisco shares initially dipped on the softer-than-expected full-year revenue guidance, they recovered to trade modestly in the green in the aftermath of the company’s FQ4 earnings call.

Speaking specifically about Ethernet, Cisco said it has already taken orders “for over half a billion dollars” for AI Ethernet fabrics. In addition to Ethernet, security remains one of the top priorities and growth drivers for Cisco. Back to AI, CFO Herren urged patience as the benefits from AI investments are not yet in P&L. Herren said that:

 

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