Cisco beats estimates, boosts buyback program by $25 billion

(Reuters) – Cisco Systems Inc reported its first rise in quarterly revenue in more than two years, which also topped analysts’ estimates, as the network gear maker’s years-long efforts to transition to a software-focused company begins to take hold.

Shares of the Dow component rose 5.3 percent to $44.34 in after-market trading on Wednesday.

The company said its board raised its buyback program by $25 billion.

Revenue from its infrastructure platforms category, which includes switching, routing and data center businesses, rose 2 percent to $6.7 billion, beating analysts’ estimate of $6.6 billion, according to Thomson Reuters I/B/E/S.

Revenue from Cisco’s security business, which offers firewall protection and breach detection systems, rose 6 percent to $558 million, but missed analysts’ average estimate of $589.5 million.

The world’s largest network gear maker forecast third-quarter adjusted profit between 64 cents and 66 cents per share, compared with analysts’ estimate of 63 cents per share.

The company posted a net loss of $8.8 billion, or $1.78 per share, in the second quarter ended Jan. 27, compared with a profit of $2.3 billion, or 47 cents per share, a year earlier.

The loss was due to an $11.1 billion charge related to the recent changes to the U.S. tax law.

Excluding items, the company earned 63 cents per share.

Revenue rose 2.7 percent to $11.9 billion.

Analysts on average had expected Cisco to report a profit of 59 cents per share and revenue of $11.8 billion.

Reporting by Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila

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