Cisco Systems Inc reported its first rise in quarterly revenue in more than two years and forecast upbeat current-quarter profit, as the network gear maker's years-long efforts to transform into a software-focused company begins to pay off.
Shares of the Dow component, which also benefited from growth in its switching business, jumped 7.1 percent to $45.09 in after-market trading on Wednesday. Cisco raised its buyback program by $25 billion, taking the total to about $31 billion. The company said it plans to bring back $67 billion of funds held overseas in the third quarter of fiscal 2018 by taking advantage of the recent changes to the US tax laws.
However, the new tax laws led to an $11.1 billion charge, pushing the company to post a loss for the second quarter. Faced with sluggish demand for its traditional switches and routers business from telecom carriers, Cisco has been moving to a software- and subscription-focused model.
"We are clearly seeing the results of the strategy we've articulated over the last 10 quarters," Chief Executive Chuck Robbins said on a post-earnings call. Revenue from its infrastructure platforms category, which includes switching, routing and data centre businesses, rose 2 percent to $6.7 billion.
Cisco posted a net loss of $8.8 billion, or $1.78 per share, in the second quarter ended January 27, compared with a profit of $2.3 billion, or 47 cents per share, a year earlier. Excluding items, the company earned 63 cents per share. Revenue rose 2.7 percent to $11.9 billion.
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