Have you evaluated the performance of Cisco Systems' (CSCO) international operations during the quarter that concluded in October 2024? Considering the extensive worldwide presence of this seller of routers, switches, software and services, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.
In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.
Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.
While delving into CSCO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
The company's total revenue for the quarter amounted to $13.84 billion, marking a decrease of 5.6% from the year-ago quarter. We will next turn our attention to dissecting CSCO's international revenue to get a clearer picture of how significant its operations are outside its main base.
A Dive into CSCO's International Revenue Trends
EMEA generated $3.59 billion in revenues for the company in the last quarter, constituting 25.92% of the total. This represented a surprise of -0.63% compared to the $3.61 billion projected by Wall Street analysts. Comparatively, in the previous quarter, EMEA accounted for $3.51 billion (25.74%), and in the year-ago quarter, it contributed $3.66 billion (24.98%) to the total revenue.
APJC accounted for 14.46% of the company's total revenue during the quarter, translating to $2 billion. Revenues from this region represented a surprise of +1.51%, with Wall Street analysts collectively expecting $1.97 billion. When compared to the preceding quarter and the same quarter in the previous year, APJC contributed $2.06 billion (15.13%) and $1.98 billion (13.51%) to the total revenue, respectively.
Revenue Forecasts for the International Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that Cisco will report a total revenue of $13.86 billion, which reflects an increase of 8.4% from the same quarter in the previous year. The revenue contributions are expected to be 26% from EMEA ($3.6 billion) and 14.2% from APJC ($1.97 billion).For the full year, a total revenue of $56.03 billion is expected for the company, reflecting an increase of 4.2% from the year before. The revenues from EMEA and APJC are expected to make up 26.1% and 14.4% of this total, corresponding to $14.59 billion and $8.05 billion respectively.
The Bottom Line
Relying on global markets for revenues presents both prospects and challenges for Cisco. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.
Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.
The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.
Cisco currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Examining the Latest Trends in Cisco's Stock Value
Over the preceding four weeks, the stock's value has appreciated by 1.2%, against an upturn of 1.1% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Cisco among its entities, has appreciated by 0.6%. Over the past three months, the company's shares have seen an increase of 13.2% versus the S&P 500's 6.2% increase. The sector overall has witnessed an increase of 3.9% over the same period.Only $1 to See All Zacks' Buys and Sells
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
