Cisco Earnings Report Steps Over a Low Bar — Dividend Hike As Well

Now we know… Earnings came in at $0.47 per share and revenues came in at $11.2 billion for the quarter. The consensus forecast from Thomson Reuters was $0.46 in earnings per share (versus $0.51 a year ago) and $11.03 billion in revenue (down 8.8%). WhisperNumber had issued a whisper number of $0.48 for the earnings report.

Another bit of big news is out — Cisco is raising its quarterly dividend up to $0.19 per quarter from $0.17. That takes the 3% yield up to 3.3%. Cisco ended the quarter with $471. billion in cash and equivalents.

Cisco is claiming a record quarter of returning $4.9 billion to its shareholders — some $900 million in dividends and $4 billion worth of share repurchases. Cash flows from operations were $2.9 billion for the second quarter.

Cisco now holds its guidance for the conference call, making the report unfinished business. Estimates for the quarter ahead are $0.48 in earnings per share (versus $0.51 a year ago) and $11.34 billion in revenue (down 7.1%).

Sterne Agee just maintained a Buy rating a day ahead of the report, and it gave a $25 price target. The team there said that there is likely downside protection to $21 based on eight-times adjusted 2015 earnings.

The networking giant had previously lowered its longer-term revenue and earnings guidance, down to 3% to 6% in revenue and down to 5% to 7% in earnings. Of course, that is after this year as analysts are looking now for a drop of 2% in earnings per share and a drop of almost 5% in sales.

The stock has traded in a range of $19.98 to $26.49 in the last 52-weeks, and its valuation is roughly 11.5 times expected forward annual earnings. Shares are directionless in the after-hours reaction after closing up $0.14 at $22.85 ahead of earnings.