Cisco Leads Dow Stocks After Earnings, Job Cuts: What to Know
Cisco Systems is the best Dow Jones stock Thursday after the tech giant beat earnings expectations and announced a new round of layoffs.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Cisco Systems (CSCO) is the best Dow Jones stock Thursday after the networking equipment specialist beat top- and bottom-line expectations for its fiscal fourth quarter and announced a 7% reduction to its global workforce.
In the three months ended July 27, Cisco said its revenue decreased 10.3% year-over-year to $13.6 billion, pressured by a 28% drop in networking revenue to $6.8 billion. Its earnings per share (EPS) fell by 23.7% to 87 cents.
"We delivered a strong close to fiscal 2024," said Cisco CEO Chuck Robbins in a statement. "In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of artificial intelligence (AI)."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Despite the decline in both the top and bottom lines, Cisco's results topped analysts' expectations. Wall Street was anticipating revenue of $13.5 billion and earnings of 85 cents per share, according to CNBC.
In a separate filing, Cisco announced a restructuring plan that will "allow it to invest in key growth opportunities and drive more efficiencies in its business." As part of its restructuring efforts, the company will be eliminating approximately 7% of its global workforce. This marks its second round of layoffs this year, with the Cisco Systems cutting 5% of its labor force back in February.
Cisco also provided an outlook for the first quarter and new fiscal year. For the first quarter, CSCO anticipates revenue in the range of $13.65 billion to $13.85 billion and earnings per share to arrive between 86 cents to 88 cents. For all of fiscal 2025, the company is guiding for revenue of $55 billion to $56.2 billion and EPS in the range of $3.52 to $3.58.
Cisco's outlook satisfies what analysts are anticipating. According to Yahoo Finance, Wall Street is forecasting revenue of $13.65 billion and earnings of 85 cents per share for the first quarter. For the full year, expectations are for revenue of $55.6 billion and earnings of $3.56 per share.
Is Cisco stock a buy, sell or hold?
Cisco Systems has struggled on the price charts this year, down 13% on a total return basis (price change plus dividends) vs the S&P 500's 23% gain.
Still, Wall Street leans bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for CSCO stock is $53.71, representing implied upside of about 10% to current levels. Meanwhile, the consensus recommendation is Buy, though with low conviction.
Financial services firm Oppenheimer is one of the more bullish outfits on CSCO stock with an Outperform rating (equivalent to a Buy) and a $58 price target.
"Cisco remains the dominant networking vendor, with strong underlying fundamentals," says Oppenheimer analyst Ittai Kidron. "We see Cisco as well positioned for the next-generation virtualized data center given its history of strong execution and M&A, product breadth, geographic diversity, and scale advantages."
The analyst adds that he's upbeat on the opportunities available in software-as-a-service (Saas) and Cisco's cloud segment, which includes security and collaboration. These initiatives, Kidron adds, will likely drive more recurring revenue.
The analyst also points to stock buybacks, which are likely to support the share price. In fiscal 2024, Cisco repurchased $5.8 billion of its own stock.
Related Content
-
I want to sell our beach house to retire now, but my wife wants to keep it.I want to sell the $610K vacation home and retire now, but my wife envisions a beach retirement in 8 years. We asked financial advisers to weigh in.
-
How to Add a Pet Trust to Your Estate PlanAdding a pet trust to your estate plan can ensure your pets are properly looked after when you're no longer able to care for them. This is how to go about it.
-
Avoid Leaving Chaos in Your Wake: Keep an Updated Estate PlanAn outdated or incomplete estate plan could cause confusion for those handling your affairs at a difficult time. This guide highlights what to update and when.
-
How to Add a Pet Trust to Your Estate Plan: Don't Leave Your Best Friend to Chance
Adding a pet trust to your estate plan can ensure your pets are properly looked after when you're no longer able to care for them. This is how to go about it.
-
Want to Avoid Leaving Chaos in Your Wake? Don't Leave Behind an Outdated Estate Plan
An outdated or incomplete estate plan could cause confusion for those handling your affairs at a difficult time. This guide highlights what to update and when.
-
I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial AdviceCan financial advisers who earn commissions on product sales give clients the best advice? For one professional, changing track was the clear choice.
-
Nasdaq Slides 1.4% on Big Tech Questions: Stock Market TodayPalantir Technologies proves at least one publicly traded company can spend a lot of money on AI and make a lot of money on AI.
-
I Met With 100-Plus Advisers to Develop This Road Map for Adopting AIFor financial advisers eager to embrace AI but unsure where to start, this road map will help you integrate the right tools and safeguards into your work.
-
The Referral Revolution: How to Grow Your Business With TrustYou can attract ideal clients by focusing on value and leveraging your current relationships to create a referral-based practice.
-
This Is How You Can Land a Job You'll Love"Work How You Are Wired" leads job seekers on a journey of self-discovery that could help them snag the job of their dreams.
-
Fed Vibes Lift Stocks, Dow Up 515 Points: Stock Market TodayIncoming economic data, including the January jobs report, has been delayed again by another federal government shutdown.
