Based

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<p class="has-drop-cap">Cisco Systems, Inc. (NASDAQ: CSCO) announced better-than-expected <a href="https://investor.cisco.com/news/news-details/2024/CISCO-REPORTS-FOURTH-QUARTER-AND-FISCAL-YEAR-2024-EARNINGS/default.aspx" target="_blank" aria-label="quarterly earnings (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">quarterly earnings</a> on Wednesday, despite facing its third consecutive quarter of declining revenue. The networking giant also revealed plans for a significant workforce reduction as part of a broader restructuring effort aimed at focusing on high-growth areas such as artificial intelligence and cybersecurity. <br><br>The news sent Cisco’s stock soaring in extended trading, with shares up 7.78% to $48.97 by 11:00 AM EDT on Thursday.</p>
<h3 id="cisco-earnings-beat-amid-revenue-challenges">Cisco Earnings Beat Amid Revenue Challenges</h3>
<p>For the fiscal fourth quarter ended July 27, Cisco reported adjusted earnings of 87 cents per share, surpassing analysts’ expectations of 85 cents. Revenue came in at $13.64 billion, slightly above the anticipated $13.54 billion. <br><br>However, this figure represents a 10% decrease from the $15.2 billion reported a year earlier, marking Cisco’s first full fiscal year drop since 2020. Despite the overall revenue decline, the company’s performance was bolstered by increased subscription revenue, particularly from its recent $28 billion acquisition of Splunk, which contributed $960 million to the quarter’s revenue.</p>
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<h3 id="cisco-continues-with-restructuring-and-workforce-reduction">Cisco Continues With Restructuring and Workforce Reduction</h3>
<p>In a move to streamline operations and redirect resources towards growth areas, Cisco announced plans to cut 7% of its global workforce. <br><br>This marks the second major round of layoffs this year, following a 5% reduction in February that affected over 4,000 employees. Based on Cisco’s reported 84,900 employees at the end of fiscal 2023, the new cuts could impact approximately 5,940 jobs. <br><br>The restructuring plan is expected to result in $1 billion in pretax charges, with $700 million to $800 million to be recognized in the current quarter and the remainder spread over fiscal 2025.</p>
<h3 id="cisco-s-future-focus-and-market-response">Cisco’s Future Focus and Market Response</h3>
<p>Cisco’s CEO Chuck Robbins emphasized the company’s commitment to investing in key growth opportunities, particularly in AI and cybersecurity. <br><br>The restructuring aims to drive efficiencies in the business while maintaining a focus on software and services, areas that have shown promise amid the challenges in Cisco’s traditional hardware-centric model. The market responded positively to Cisco’s announcements, with the stock outperforming the broader market on Thursday. Cisco’s market capitalization stood at $197.301 billion, with a <a href="https://tokenist.com/investing/p-e-ratio/" class="deco-link" rel="noopener noreferrer nofollow">price-to-earnings ratio</a> of 17.89 and <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">earnings per share</a> of $2.54.<br><br>Despite the day’s gains, Cisco’s year-to-date return of -0.67% and one-year return of -6.19% indicate ongoing challenges, especially when compared to <a href="https://tokenist.com/investing/spx-vs-spy/" class="deco-link" rel="noopener noreferrer nofollow">the S&amp;P 500’s</a> respective gains of 15.77% and 23.00%. However, the company’s five-year return of 13.07%, while lagging behind the S&amp;P 500’s 94.40%, suggests some resilience in the face of industry shifts and global economic pressures.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
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<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/cisco-shares-surge-on-earnings-beat-and-restructuring-plans/">Cisco Shares Surge on Earnings Beat and Restructuring Plans</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Cisco Shares Surge on Earnings Beat and Restructuring Plans

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