Strong demand for software and services offset tepid hardware demand at Cisco (US:CSCO) in the third quarter to 30 April, driving revenues up 3 per cent. Combined with diligent cost control, that pushed adjusted net income up 3 per cent to $2.9bn (£2.0bn).
Cisco has shifted its focus from switches, routers and other hardware to selling software and subscription services. Its efforts underpinned double-digit sales growth in security, collaboration and video broadcasting technology, driving service revenues up 11 per cent. Product revenues also inched up 1 per cent, reflecting brisk trading in Asia. Cisco also generated over $3bn in operating cash flow and returned nearly $2bn to investors through dividends and share buybacks.
Broker Drexel Hamilton expects pre-tax profits of $15.13bn this financial year, giving EPS of $2.32 ($14.51bn and $2.21 in FY2015).
