Cisco's security business revenue growth misses estimates, shares drop

Earnings Reuters

FILE - This Wednesday, May 9, 2012, file photo, shows an exterior view of Cisco Systems Inc. headquarters in Santa Clara, Calif. Cisco Systems Inc. reports earnings, Wednesday, May 17, 2017. (AP Photo/Paul Sakuma, File) (AP Photo/Paul Sakuma, File)

(Reuters) - Cisco Systems Inc's (CSCO) revenue from its closely-watched security business rose less than analysts had estimated in the fourth quarter, sending the company's shares down about 2.5 percent in after-hours trading on Wednesday.

Continue Reading Below

Revenue from Cisco's switching business, easily its largest, also missed Wall Street's estimates, resulting in the company's total revenue falling for the seventh straight quarter.

With its traditional business of making switches and routers struggling, Cisco, like other legacy technology firms, is focusing on high-growth areas such as security, the Internet of Things and cloud computing.

In Cisco's security business, which offers firewall protection and breach detection systems, revenue rose 3 percent to $558 million, but fell short of analysts expectations of $580.5 million, according to financial and data analytics firm FactSet.

More from FOX Business

Revenue from Cisco's switching business fell 9 percent to $3.44 billion, missing analysts' average estimate of $3.57 billion, according to FactSet.

But revenue in the company's wireless and data center businesses topped analysts' estimates, helping overall revenue meet expectations.

Continue Reading Below

The world's largest network gear maker said revenue fell nearly 4 percent to $12.13 billion in the fourth quarter ended July 29.

Analysts on average were expecting revenue of about $12.1 billion, according to Thomson Reuters I/B/E/S.

Cocco's net income fell to $2.42 billion, or 48 cents per share, from $2.81 billion, or 56 cents per share.

Excluding one-time items, it earned 61 cents per share, in line with analysts' estimates.

The company's earnings and revenue forecast for the current quarter was largely in line with analysts' estimates.

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Savio D'Souza)

What do you think?

Click the button below to comment on this article.