Here’s the Reason Why Cisco Systems, Inc. (CSCO) Stock is Dipping in Aftermarket

Cisco Systems, Inc. (CSCO), a company that designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry, has declined 6.08% in aftermarket trading session and consequently is trading at $53.31 at the time of the writing. The decline is attributable to the announcement of quarterly results. On Wednesday, CSCO closed the day at $56.76 after slipping 0.42% during regular trading hours.

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Why CSCO Declining?

On Wednesday, CSCO released the financial results for the first quarter of the fiscal year 2022, which ended on 30th October 2021. The company generated total revenue of $12.9 billion during the quarter against $11.92 billion for the same period of 2020. The gross margin for the period was $8.05 billion against $7.58 billion for the same period of 2020. The operating expenses for the period were $4.65 billion against $5 billion for the same period of 2020. The company generated a net income of $2.98 billion (or $0.71 and $0.70 per basic and diluted share respectively) against $2.17 billion (or $0.51 per basic and diluted share) for the same period of 2020.

Financial Outlook

Alongside financial results, CSCO also reported the financial outlook for upcoming quarters. The company believes that during the second quarter of the fiscal year 2022, the revenue would experience a growth of 4.5 to 6.5% on a year/year basis. The non-GAAP gross margin rate, an increase of 63.5% to 64.5% is likely, while the non-GAAP operating margin rate is expected to increase 32.5% to 33.5%. The non-GAAP EPS for the second quarter of fiscal 2022 is expected to stand between $0.80- $0.82. For the complete fiscal year 2022, the company expected the revenue to grow 5% to 7% on a year/year basis.

Executive Commentary

Chuck Robbins, Chair and CEO of CSCO, while commenting on the results said that the company experienced robust growth during the quarter even though there existed a dynamic supply environment during the period. He further said that the reliance upon innovation and successful business transformation position the company for a period of growth during fiscal 2022.

What’s Ahead for CSCO?

Statistics reveal that CSCO stock has experienced much volatility during the last 12 month period. This depicts the stability associated with the stock despite the capricious environment that existed throughout the year and affected most of the stocks. Hence, potential investors should keep a closer look at CSCO stock related developments.