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Cisco shares fall despite surpassing Wall Street earnings estimates, dragging down the Dow

The tech company beat consensus estimates on earnings and revenue
Cisco sign
Shares of the company continued to decline in Thursday morning trading

Cisco Systems Inc (NASDAQ:CSCO) announced its fiscal third quarter results, reporting better-than-expected earnings but its services revenue concerned investors.

The tech company reported earnings of US$0.66 per share on revenue of US$12.46 compared with US$0.60 on revenue of US$11.9bn in the previous year’s third quarter.

The California-based company beat Wall Street estimates of US$0.65 EPS on revenue of $12.43bn.

For its fiscal fourth quarter, the company is expecting to earnings of US$0.68 to US$0.70 per share on revenue between US$12.62bn and US$12.86bn, in line with analyst estimates of US$0.69 EPS on revenue of US$12.73bn.

Its services revenue missed Wall Street expectations, reporting US$3.16bn versus consensus expectation of US$3.22bn.

“We are executing well against our strategy, our innovation pipeline has never been stronger, and we continue to make great progress in transforming towards more software and subscriptions,” said CEO Chuck Robbins.

The company announced in early May that its service provider video software solutions business was being acquired by global private equity firm Permira for an undisclosed amount.

Shares of the company continued to fall nearly 4% to US$43.74 in Thursday morning trading, dragging down the Dow.

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