Cisco reported in-line fourth quarter financial results Wednesday despite significant segment losses and a weak revenue outlook for the current quarter.
The networking giant delivered a net income of $2.4 billion, or 48 cents per share. Non-GAAP earnings were 61 cents per share on revenue of $12.1 billion, down 4 percent year over year.
Wall Street was looking for earnings of 58 cents per share with $11.89 billion in revenue. Cisco's shares were down around 2 percent after hours.
For the current quarter, Wall Street is looking for non-GAAP earnings of 60 cents per share with $12.06 billion in revenue. Cisco responded with a revenue outlook that ranges from a 3 percent to 1 percent decrease from the year ago quarter, with EPS between 59 cents a share and 61 cents a share.
Breaking revenue down by segment, Cisco said Q4 product revenue was down 5 percent, switching revenue decreased 9 percent, collaboration revenue decreased by 3 percent and data center revenue decreased by 4 percent. Meanwhile, service provider revenue decreased by 10 percent. Recurring revenue was 31 percent of total revenue, up 4 percent year over year, Cisco said.
"We made tremendous progress transitioning our business to more software and recurring revenue and delivered on our commitment to accelerate innovation in our core and across the portfolio," said Cisco CEO Chuck Robbins.
"Going forward, you should expect to see our software business benefit from the transition of our campus networking portfolio to a subscription model," Robbins added during the conference call with analysts.