Tencent Securities News according to foreign media reports, Cisco Systems (NASDAQ:CSCO) announced the company's financial results for the third quarter of fiscal year 2018 after the close of the US stock market on Wednesday. According to the report, Cisco Systems's net income in the third quarter was $12.5 billion, up 4% from $11.9 billion in the same period last year; net profit was $2.7 billion, up 7% from $2.5 billion in the same period last year; and diluted income per share was $0.56, up 12% from $0.50 in the same period last year. Not in accordance with US general accounting standards, Cisco Systems's adjusted diluted earnings per share in the third quarter was 66 cents, exceeding Wall Street analysts' average expectations of 65 cents.
Performance Summary:
Revenue
Cisco Systems's total revenue in the third quarter was $12.5 billion, up 4 per cent from $11.9 billion in the same period last year.
In terms of products and service types, Cisco Systems's total revenue from product business in the third quarter was US $9.304 billion, up 5% from US $8.885 billion in the same period last year.
-revenue from infrastructure and platform products was $7.163 billion, an increase of 2 per cent over the same period last year
Revenue from applications was $1.309 billion, an increase of 19% over the same period last year
Revenue from security products was $583 million, an increase of 11% over the same period last year
Revenue from other products was $249 million, down 6 per cent from the same period last year.
Cisco Systems's revenue from services in the third quarter was $3.159 billion, up 3 per cent from $3.055 billion in the same period last year.
By region, Cisco Systems's revenue from the US in the third quarter was $7.161 billion, up 2 per cent from the same period last year; revenue from EMEA was $3.281 billion, up 9 per cent from the same period last year; and revenue from the Asia-Pacific region was $2.021 billion, up 7 per cent from the same period last year.
Profitability:
Cisco Systems's third-quarter net income under GAAP was $2.7 billion, or 56 cents per diluted share, better than the same period a year earlier. In the third quarter of fiscal 2017, Cisco Systems's net income was $2.5 billion, or 50 cents per diluted share.
Excluding one-time expenses (not in accordance with GAAP), Cisco Systems's third-quarter net profit rose 6 per cent year-on-year to $3.2 billion, or 66 cents per diluted share, exceeding Wall Street analysts' expectations. By comparison, net income not measured in accordance with GAAP in the same period last year was $3 billion, or 60 cents per diluted share. Analysts had expected Cisco Systems's adjusted earnings per share in the third quarter to be 65 cents on average, according to a FactSet survey.
Cisco Systems's operating profit in accordance with the US GAAP in the third quarter was US $3.1 billion, down 1% from the same period last year, and the operating interest rate was 25.1%. The operating profit not in accordance with the US GAAP was US $3.9 billion, an increase of 2% over the same period last year, and the operating interest rate was 31.5%.
Cisco Systems's total gross margin and product gross margin in accordance with US GAAP in the third quarter were 62.3% and 61.0%, respectively. Not measured in accordance with US GAAP, Cisco Systems's total gross margin and product gross margin in the third quarter were 63.9% and 62.9%, respectively. The gross profit margin of Cisco Systems's services business in the third quarter was 65.8% in accordance with US general accounting standards, while the gross profit margin not measured by US general accounting standards was 66.9%.
In this quarter, Cisco Systems's gross profit margin for the US business was 64.4%, for Europe, the Middle East and Africa was 64.3%, and for the Asia-Pacific business was 61.7%.
Other financial information:
According to US general accounting standards, Cisco Systems's reserve income tax rate for the third quarter is 17.3 per cent. Not measured in accordance with US GAAP, Cisco Systems's reserve income tax rate for the third quarter is 21.0%.
Cisco Systems's cash flow from operating activities in the third quarter was $2.4 billion, down 28% from $3.4 billion a year earlier. Cisco Systems's cash, cash equivalents and investments totaled $54.4 billion at the end of the third quarter, compared with $73.7 billion at the end of the second quarter of 2018 and $70.5 billion at the end of fiscal year 2017. Cisco Systems's cash, cash equivalents and investments in the United States totaled $47.5 billion at the end of the third quarter of fiscal 2017.
Cisco Systems's deferred revenue in the third quarter was $19 billion, an increase of 9% over the same period last year, of which revenue from deferred products increased by 18% over the same period last year.
Cisco Systems bought back about 140 million common shares in the third quarter, with an average purchase price of $42.83 per share, for a total expenditure of about $6 billion. Cisco Systems paid a dividend of 33 cents per share in the third quarter of fiscal 2018, at a total cost of about $1.6 billion. According to the share buyback plan, Cisco Systems can still further buy back shares worth about $25.1 billion without a specific deadline.
Performance outlook:
Cisco Systems predicts that the company's revenue in the fourth quarter will grow by 4% to 6% compared with the same period last year; according to US GAAP, earnings per share will be between US $0.55 and US $0.60; if not in accordance with US GAAP, earnings per share will be between US $0.68 and US $0.70; the gross profit margin not in accordance with US GAAP will be between 63% and 64%. Operating profit margins that do not comply with US GAAP will be between 29.5 per cent and 30.5 per cent; the reserve income tax rate that does not comply with US GAAP will be 21 per cent.
Stock price performance:
Cisco Systems shares closed at $45.16 in regular trading on the Nasdaq on Wednesday, down 32 cents, or 0.70 percent, from the previous session. Cisco Systems shares fell another $1.71, or 3.79%, to $43.45 in after-hours trading as of 16:42 EDT (4:42 Beijing time on the 18th) after the earnings announcement. In the past 52 weeks, the lowest share price of Cisco Systems is $30.36 and the highest share price is $46.37. (nebula)