Cisco (NASDAQ: CSCO) stock slumbered on Thursday after the company reported better-than-expected earnings for its fiscal third quarter, which ended on April 28.
Earnings came in at 66 cents per share, excluding certain items, vs. 65 cents per share as expected by analysts, according to Thomson Reuters
Revenues were $12.46 billion, vs. $12.43 billion as expected by analysts.
With respect to guidance for the fiscal fourth quarter, Cisco said in a statement that it expects 68 to 70 cents in earnings per share, excluding certain items, on 4% to 6% revenue growth, which comes out to $12.62 billion to $12.86 billion in revenue. Analysts had expected 69 cents in earnings per share, excluding certain items, and $12.73 billion in revenue.
The company's services business segment produced $3.16 billion in revenue, below the consensus estimate of $3.23 billion
Three of Cisco's four product categories surpassed estimates, though. The most important, the Infrastructure Platforms segment, which includes data-center networking switches, had $7.16 billion in revenue, above the consensus estimate of $7.14 billion.
Cisco "continues to achieve success" in selling its Catalyst 9000 switches, and the fact that they require customers to also buy software licenses supports the company's transition toward a larger focus on software, Raymond James analysts wrote.
CEO Chuck Robbins told analysts during an earnings call Wednesday that Cisco will introduce more software services, including in association with routing products.
Cisco shares tumbled $1.82, or 4%, to $43.34 Thursday morning.
