Investing.com – Cisco Systems (NASDAQ:) raised its full-year revenue forecast after reporting better-than-expected fiscal third-quarter results as higher margins helped offset revenue declines.
Shares of the networking equipment maker rose in pre-market trading in the United States following the release of its earnings report.
For the three months ended April 27, the company reported adjusted earnings per diluted share (EPS) compared with $1.00 a year earlier.
Revenue fell 13% a year ago to $12.7 billion, with Chief Financial Officer Scott Herren noting the impact of a continued inventory backlog. Cisco’s revenue has fallen for two quarters in a row.
But in a note to clients, Goldman Sachs analysts said order demand is “stabilizing” and should return to “normal seasonality” early in Cisco’s 2026 fiscal year.
Wall Street estimates adjusted earnings per share of $0.83 on revenue of $12.48 billion in Cisco’s fiscal third quarter.
Gross margin rose to 65.1% from 63.4% a year earlier, helped by higher corporate spending and easing supply chain issues. Splunk (NASDAQ:), the company Cisco acquired to bolster its cybersecurity offerings, also increased revenue by $413 million.
Looking ahead, Cisco now projects revenue in the range of $53.6 billion to $53.8 billion, up from its previous forecast of $51.5 billion to $52.5 billion. Full-year adjusted earnings per share will also be in the range of $3.69 to $3. 71, up from $3.68 to $3.74 in February.
Yasin Ebrahim contributed to this report.