Cisco Systems Inc. is now expected to beat industry analysts’ forecast for the company’s second-quarter earnings. This news has resulted in a 9.6% rise in Cisco stocks as markets close.
With the economy gradually recovering from its coronavirus slump, governments and companies alike are expected to resume spending on networking gear, consequently fueling Cisco’s expected sales growth.
As a result, while analysts expect Cisco’s earnings for the quarter-ending January to decline by 3% from a year earlier, the company itself predicts that it will only suffer a 2% slide. The San Jose, California-based technology conglomerate announced on Thursday that it retains faith in its customers, referring to how they are working as hard as they can to continue working from home and executing projects despite coronavirus lockdowns.
Considering that most of Cisco’s revenue comes from the purchase of network hardware by government agencies and phone service providers, the company expects its profits to stabilize as the economy continues to mend.
Just some of Cisco’s major customers who are fueling the company’s financial success include Amazon.com Inc. and Microsoft Corp. Cisco’s shares are now traded at $42.38 each, after closing at $38.67 the previous day.
