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Cisco Earnings Due

Published 02/22/2018, 01:27 PM
Updated 03/09/2019, 08:30 AM

During the earnings report of Cisco Systems Inc (NASDAQ:CSCO) for its fiscal second quarter, Cisco announced that it will bring in around $67 billion coming from outside the country. The said amount which is previously being held outside the country will be brought in the United States as they take advantage of the previous changes made to the U.S. tax code.

The plan is currently expected to be conducted during the third fiscal quarter. Other companies have also announced similar repatriation plans for their foreign cash holdings. Other companies include Apple (NASDAQ:AAPL) who intends to bring in around $252 billion from outside the United States back to the country with taxes amounting to around $38 billion.

Cisco also announced that it took a one-time charge of $11.1 billion due to the massive U.S. tax overhaul. On the other hand, the repatriated funds may fund more of the company’s acquisitions. However, Cisco has stated that the plans for the allocation of its capital would remain the same.

During the quarterly earnings of the company, Cisco's revenue have risen for the first time in the past two years. Cisco also forecasted during the earnings report that its current quarter earnings would beat most analyst estimates following its efforts over the past year to transition from being a network gear maker into a company who focuses mostly on software.

Cisco chief executive Chuck Robbins stated during the earnings call with analysts that the company has begun seeing the results of the strategy they have devised over the past ten quarters.

For the fiscal third quarter, Cisco forecasted earnings of around 64 to 66 cents per share with their revenue growing by 3% to 5% from their revenue during the same quarter last year. Analysts are expecting earnings of 63 cents per share on a revenue of $12.13 billion.

Shares of Cisco which has gained 10% since the beginning of the year has risen by 5% last week following the fiscal second-quarter earnings beat. Cisco has also announced a share buyback program worth $25 billion. By the end of January last month, the company had cash worth $71 billion which was held abroad which is the third biggest pile of unrepatriated earnings from outside the country from any American company next to Apple and Microsoft (NASDAQ:MSFT).

The buyback plan announced by Cisco would push the number of its authorized stocks which will be repurchased to $31 billion. Over the past couple of years, Cisco had recorded $39 billion in borrowings tapped through debt markets in maintaining dividend payments.

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