LONDON, UK / ACCESSWIRE / August 22, 2016 / Active Wall St. announces its post-earnings coverage on Cisco Systems, Inc. (NASDAQ: CSCO). The company reported its fourth-quarter fiscal 2016 financial results on August, 17, 2016. The company topped market expectation with a 16% growth in its Security division; however, the company also announced significant layoffs. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended on June 30, 2016, Cisco posted net income of $2.81 billion, or $0.56 per share, up 21% from $2.32 billion, or $0.45 per share, in the corresponding period a year earlier. The company posted adjusted earnings of $0.63 per share beating analysts' consensus estimate of $0.60 per share. Cisco's revenue declined 2% to $12.64 billion in Q4 FY16 from $12.84 billion in Q4 FY15; this, however, topped analysts' forecast of $12.57 billion in revenue.

Segment Analysis

For Q4 FY16, Cisco said its product revenue was up 1%, with growth was led by its Security division which grew 16% to $540 million. The company's major revenue contributor, the Switching segment, reported revenue growth of 2% on y-o-y basis to $3.79 billion, while the NGN routing business reported a 6% decline in revenue growth to $1.88 billion.

On a geographical basis, revenue in Americas was up 3% to $7.64 billion, EMEA grew 3% to $3.10 billion, while APJC revenue declined 2% to $1.90 billion.

Job Cut

Cisco announced that it will trim down 5,500 positions, which represents about 7% of its global workforce, beginning in the first quarter fiscal 2017. The San Jose, California headquartered company said it would reinvest the savings from the job cuts into businesses that it expects to grow, including its own software and service offerings. Cisco said it plans to record pre-tax charges of up to $700 million charges for severance and other one-time termination benefits, and other associated costs.

The company noted in the earnings release: "Today's market requires Cisco and our customers to be decisive, move with greater speed and drive more innovation than we've seen in our history."

Cisco said it expects to reinvest the cost savings from its restructuring plan into "key priority areas such as security, IoT, collaboration, next generation data center and cloud."

Guidance

For its Q1 FY17outlook, Cisco announced that it expects adjusted earnings in the range of $0.58 to $0.60 per share and for revenue to be up or down, between ?1% and 1%, on y-o-y basis. Analysts were projecting earnings of $0.60 per share and revenue to decline by 2% to $12.5 billion.

Stock Performance

At the close of trading session on August 19, 2016, Cisco's shares were up marginally by 0.13% at $30.52. A total of 25.12 million shares changed hands for the day, which was higher than the 3 months average volume of 23.46 million shares. The company's stock price has advanced 15.32% since the beginning of the year as compared to the S&P 500 which is up 8.31% during the same time frame.

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SOURCE: Active Wall Street