Business

Cisco Shares Pop After Solid Q3 Earnings, Bullish Outlook Despite China Tariffs


Cisco Systems Inc. ( CSCO - Get Report ) shares were indicated sharply higher Thursday after the network equipment maker posted stronger-than-expected third quarter earnings and said tariff increases on China-made goods wouldn't affect its near-term profit outlook.


Cisco said adjusted earnings for the three months ending on April 27, the company's fiscal third quarter, came in at 77 cents a share, up 18% from the same period last year and topping the Street consensus forecast by a penny.


"If you remember back many months ago when the 10% tariffs were announced we said, we had basically three phases to our strategy," CEO Chuck Robbins told investors on a conference call late Wednesday.


"And we see very minimal impact at this point based on all the great work the teams have done and it is absolutely baked into our guide going forward."


Shares of the Dow component were marked 3.43% higher in pre-market trading Thursday, indicating an opening bell price of $54.24 each, a move that would extend the stock's year-to-date gain to around 25.2%.


"Cisco believes the increase to 25% from 10% will have minimal impact and fully contemplated the tariffs in their guide as the company has already executed on everything needed to mitigate tariffs from an operational standpoint, and this reconciles with what we have been hearing from both IT resellers and Cisco channel sales partners," said Credit Suisse analyst Sami Badri, who boosted his price target on the stock by $5 a share to $57 following last night's earnings release while keeping a market neutral rating.






Powered by Blogger.