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.
![Cisco Systems logo in white with black backdrop on display at the Mobile World Congress in Spain](https://cdn.mos.cms.futurecdn.net/KsN33eNjtcVd6E3wF7RgN8-415-80.jpg)
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)."
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-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
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Will North Dakota Property Tax Be Eliminated?
Property Tax A new property tax proposal will be a key ballot item for the Peace Garden State.
By Gabriella Cruz-Martínez Published
-
Why You Should Expect a Lower Social Security COLA for 2025
Avoid the COLA social security dip in 2025 with a Health Savings Account
By Sandra Block Published
-
In Family Philanthropy, Embracing Differences Can Pay Off
Different approaches to charitable giving among generations and individuals can actually enhance the family's giving. Here's how.
By Julia Chu Published
-
Grow Your Investments Like Yale, Through a Self-Directed IRA
Yale's successful endowment focuses on alternatives. With a self-directed IRA, an individual investor could design a portfolio based on similar principles.
By Jason DeBono Published
-
Five Things About Annuities That May Surprise You
They're more varied, flexible and cost-effective than most people think, so don't let their complexity scare you off.
By Ken Nuss Published
-
Why a 15-Year Mortgage Could Be the Key to a Larger Nest Egg
Your mortgage payments would be higher, yes, but you'd save quite a lot on interest and be mortgage-free 15 years sooner, freeing assets for other investments.
By Dave Liniger Published
-
5 Stocks to Buy for a Trump Presidency
The race for the White House is heating up and these five stocks are set to benefit if Donald Trump claims victory.
By Will Ashworth Published
-
Six Target-Date Funds to Buy For Your Retirement
These six target-date funds are good set-it-and-forget-it options that are a staple of retirement plans.
By Nellie S. Huang Published
-
How to Deal With Inflation: Advice From a Financial Adviser
Higher prices are hitting everyone, but if you're especially hurting, here are some ways that could help you to cope.
By Kelsey M. Simasko, Esq. Published
-
Stock Market Today: Dow Dives 410 Points After August Jobs Miss
A big slump in tech stocks thanks to Broadcom's post-earnings slide put pressure on the main indexes too.
By Karee Venema Published