(Reuters) – Cisco Systems shares surged approximately 4% before trading began on Thursday, buoyed by an optimistic fourth-quarter forecast. The forecast suggested continued stabilization in networking equipment demand and gains from acquiring cybersecurity firm Splunk for $28 billion.
Sluggish demand and excess inventory accumulation posed challenges for the world’s largest networking equipment maker. Lingering supply-chain issues further complicated the situation.
“After the past couple of quarters of meaningful inventory digestion headwinds, we viewed these order numbers as a positive,” Morgan Stanley analysts said in a note.
According to LSEG data, Cisco projected fourth-quarter revenue between $13.4 billion and $13.6 billion. Analysts’ estimates fell slightly below this projection.
“We currently expect customers to complete the installation of the majority of their inventory by the end of our fiscal year in July,” said CEO Charles Robbins on a post-earnings call.
Product orders remained flat in the third quarter, excluding the Splunk buyout’s impact, compared to a 12% decline in the prior quarter.
Cisco was set to add almost $8 billion to its market value on Thursday, if premarket gains held.
Additionally, Cisco’s strong market position and reputation contribute to its success amidst rising Networking Equipment Demand. With a robust portfolio of products and services, Cisco remains a trusted partner for organizations seeking reliable networking solutions. As networking becomes increasingly vital in the digital age, Cisco’s leadership in the industry solidifies its position as a market leader.
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