Why Cisco Systems Stock Is Soaring Today
Shares of Cisco Systems (NASDAQ: CSCO) surged as much as 7.2% higher on Thursday morning, driven by a solid fourth-quarter earnings report. The stock had retreated to a 5.7% gain by 2:40 p.m. ET, but that move still added more than $11 billion to Cisco's massive market cap.
Cisco's top-line sales landed at $13.1 billion in the fourth quarter, unchanged from the year-ago report. Adjusted earnings fell by 1%, stopping at $0.83 per share. Your average analyst was looking for earnings near $0.82 per share on revenue in the neighborhood of $12.7 billion, so the reported results were a mixed bag. Management's guidance targets for the next fiscal year were also broadly aligned with current Wall Street expectations.
However, the company also provided a positive view of its order book. Demand for Cisco's data center and telecom-grade networking equipment remains high, even though shipments are limited by component shortages. Customers are sticking with their not-yet-delivered purchases, and canceled orders are actually running below their pre-pandemic baseline level. As a result, Cisco's order backlog stands at what it calls "record highs" and revenue should surge when the semiconductor suppliers get their ducks in a row again.
Source Fool.com
