Cisco Systems (CSCO) on Wednesday reported fiscal third-quarter earnings and revenue that fell from a year earlier but topped consensus estimates as product orders improved from a year earlier. The company’s sales guidance for Cisco stock in the current July-ending quarter came in above expectations.

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The computer networking giant reported financial results after the market close. Pro-forma results included recently acquired Splunk for the first time. The deal closed March 18. Splunk added $413 million in fiscal Q3 revenue.

“Revenue, gross margin and EPS in Q3 were at the high end or above our guidance range, both including and excluding Splunk, resulting in continued operating leverage,” said Scott Herren, chief financial officer in the earnings release. “Customers are consuming the equipment shipped over the last few quarters in line with our expectations and we are seeing stabilization of demand as a result.”

Cisco earnings fell 12% from a year earlier to 88 cents on an adjusted basis. Revenue fell 13% to $12.7 billion. Analysts estimated that Cisco would earn 83 cents on revenue of $12.53 billion, according to FactSet.

On the stock market today, Cisco stock rose 4.4% to 51.86 in extended trading.

CSCO Stock: Revenue Outlook

For the July quarter of fiscal 2024, Cisco forecasts earnings of 85 cents at the midpoint of guidance vs. analyst estimates of 86 cents.

In addition, Cisco says it expects sales of $13.5 billion at the midpoint of its outlook. Analysts predicted that sales will fall 13% to $13.25 billion.

While Cisco has increased revenue from software and services, it still garners over two-thirds of revenue from computer networking gear, mainly switches and routers. While the enterprise market has weakened, Cisco’s telecom customers also are also  spending less.

Cisco Stock: Splunk Deal

Heading into the Cisco earnings report, the company owned a weak Relative Strength Rating of 24 out of a best-possible 99, according to IBD Stock Checkup.

CSCO stock had retreated 2% in 2024, prior to the fiscal Q3 earnings report.

Meanwhile, Cisco acquired software maker Splunk for $28 billion in cash. With roots in data analytics software, Splunk has expanded into cybersecurity.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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