Cisco Systems, Inc. (CSCO) Tops Q4 EPS by 2c; Plans to Cut 8,000 Jobs

(Updated - August 13, 2014 4:07 PM EDT)

Cisco Systems, Inc. (NASDAQ: CSCO) reported Q4 EPS of $0.55, $0.02 better than the analyst estimate of $0.53. Revenue was $12.4 billion, versus the consensus at $12.1 billion.

On its call, the company said it sees Q1 adjusted EPS of $0.51 - $0.53, with the estimate at $0.53. The company plans to cut 6,000, or 8 percent of its workforce. The company also said it sees no bounce back of emerging markets is expected for "several quarters."

"We are executing well in a tough environment and delivered our best non-GAAP earnings per share quarter in our history. I'm pleased with how we are transforming our company over the past several years and that journey continues," stated John Chambers, Cisco chairman and chief executive officer. "We are focused on growth, innovation and talent, especially in the areas of security, data center, software, cloud and internet of everything. Our strategy is sound, our financials are strong, and our market leadership is secure. We have the team in place to deliver and are uniquely positioned to help our customers solve their biggest business problems."

Cash and Cash Equivalents and Investments

• Cash flows from operations were $3.6 billion for the fourth quarter of fiscal 2014, compared with $3.2 billion for the third quarter of fiscal 2014, and compared with $4.0 billion for the fourth quarter of fiscal 2013. Cash flows from operations were $12.3 billion for fiscal 2014, compared with $12.9 billion for fiscal 2013.
• Cash and cash equivalents and investments were $52.1 billion at the end of the fourth quarter of fiscal 2014, compared with $50.5 billion at the end of the third quarter of fiscal 2014, and compared with $50.6 billion at the end of the fourth quarter of fiscal 2013.

Dividends and Stock Repurchase Program

• During the fourth quarter of fiscal 2014:
  • Cisco paid a cash dividend of $0.19 per common share, or $974 million.
  • Cisco repurchased approximately 61 million shares of common stock under the stock repurchase program at an average price of $25.11 per share for an aggregate purchase price of $1.5 billion.
• During fiscal year 2014:
  • Cisco paid cash dividends of $0.72 per common share, or $3.8 billion.
  • Cisco repurchased approximately 420 million shares of common stock under the stock repurchase program at an average price of $22.71 per share for an aggregate purchase price of $9.5 billion. As of July 26, 2014, Cisco had repurchased and retired 4.3 billion shares of Cisco common stock at an average price of $20.63 per share for an aggregate purchase price of approximately $88.4 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $8.6 billion with no termination date.

Guidance:

The company sees Q1 adjusted EPS of $0.51 to $0.53, with the estimate at $0.53. Cisco plans to cut 6,000 jobs, or about 8 percent of its workforce. The company sees reinvesting nearly all of its cost-savings back into the business.

For earnings history and earnings-related data on Cisco Systems, Inc. (CSCO) click here.

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