Cisco Systems shares traded near $98.14 as of 9:45 a.m. Eastern on Friday, down about $3.88, or 3.8%, from Thursday’s close of $102.01. The networking company reported record fiscal first-quarter results after Thursday’s close.
Revenue rose 24% from a year earlier to $18.52 billion, which Cisco said was its strongest revenue growth rate in more than 15 years. Net income was $4.6 billion, or $1.14 a share, up from $2.9 billion, or 72 cents. Adjusted earnings were $1.40 a share, up 40% from $1.00.
Investors focused on the margin squeeze, Investing.com reported. Adjusted gross margin fell to 65.6% from 68.1% a year earlier, and adjusted product gross margin dropped to 63.7% from 67.2%. Yahoo Finance reported that the decline reflected a larger share of lower-margin AI networking hardware and higher memory costs, and SiliconANGLE also pointed to rising memory chip prices. The 65.6% was within the 65% to 66% range Cisco had forecast in August.
Cisco raised its fiscal 2027 revenue forecast to $74.8 billion to $75.8 billion, from $72.2 billion to $73.4 billion, and its adjusted earnings forecast to $5.47 to $5.53 a share, from $5.05 to $5.11. It now expects $9 billion of AI infrastructure revenue from hyperscalers this fiscal year, up from $7.5 billion.
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