Since Cisco (CSCO, Financial) authorized its stock repurchase program under former CEO John Chambers, the company has returned, as of July 25, 2015, $92 billion to shareholders. Cisco is one of the most shareholder-friendly companyies in the tech sector. The company has return over $100 billion to shareholders when you include dividend increases over the last few years. I believe shareholders and Wall Street shouldn't be nervous about Cisco's new CEO Chuck Robbins. He handled it like a champ, and the company reported results that beat Wall Street analyst estimates. During an interview with Mad Money on CNBC Wednesday Robbins hinted that more cybersecurity acquisitions are in Cisco's future. Cisco has over $40 billion in cash offshore and Robbins is planning to use some of that cash to acquire cybersecurites. Robbins is moving the company more into cybersecurites believe that there is massive growth in the cybersecurity sector. Wall Street analysts are still getting used to how different Robbins is from Cisco's previous CEO, John Chambers, who was famous for using Cisco earnings calls to offer insights into the global economy.
Cisco System fourth quarter earnings and full year results
Cisco beat Wall Street analyst estimates for the fourth quarter and full year results. Cisco reported fourth quarter revenues of $12.8 billion and net income of $2.8 billion or $0.45/share. The firms non-GAAP net income for the quarter was $3.0 billion or $0.59/share. Cisco saw full year revenues increased by 4% to $49 billion from the previous year. The firm had full year earnings per share of $1.75 and non-GAAP earnings per share of $2.21.
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| Q4 GAAP Results | |||||||||
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| Â | Â | Q4 2015 | Â | Q4 2014 | Â | Vs. Q4 2014 | Â | ||
| Revenue | Â | $ | 12.8 billion | Â | $ | 12.4 billion | Â | 3.9 | % |
| Net Income | Â | $ | 2.3 billion | Â | $ | 2.2 billion | Â | 3.2 | % |
| Diluted Earnings per Share (EPS) | Â | $ | 0.45 | Â | $ | 0.43 | Â | 4.7 | % |
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| Q4 Non-GAAP Results | |||||||||
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| Â | Â | Q4 2015 | Â | Q4 2014 | Â | Vs. Q4 2014 | Â | ||
| Net Income | Â | $ | 3.0 billion | Â | $ | 2.8 billion | Â | 6.2 | % |
| EPS | Â | $ | 0.59 | Â | $ | 0.55 | Â | 7.3 | % |
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| Fiscal Year GAAP Results | |||||||||
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| Â | Â | FY 2015 | Â | FY 2014 | Â | Vs. FY 2014 | Â | ||
| Revenue | Â | $ | 49.2 billion | Â | $ | 47.1 billion | Â | 4.3 | % |
| Net Income | Â | $ | 9.0 billion | Â | $ | 7.9 billion | Â | 14.4 | % |
| EPS | Â | $ | 1.75 | Â | $ | 1.49 | Â | 17.4 | % |
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| Fiscal Year Non-GAAP Results | |||||||||
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| Â | Â | FY 2015 | Â | FY 2014 | Â | Vs. FY 2014 | Â | ||
| Net Income | Â | $ | 11.4 billion | Â | $ | 10.9 billion | Â | 4.5 | % |
| EPS | Â | $ | 2.21 | Â | $ | 2.06 | Â | 7.3 | % |
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The company had cash flow from operation of $12.6 billion for the full year compared to $12.3 billion for fiscal year 2014. Cisco saw deferred revenues increase 7% to $15 billion and saw product deferred revenues in the fourth quarter increase by 21%. During the year Cisco saw its product backlog fall from $5.4 billion in fiscal year 2014 to $5.1 at the end of fiscal year 2015.
After reporting its fourth quarter earnings and full year results CEO Chuck Robbins said in a statement, "I'm stepping into the CEO role at an incredibly exciting time for Cisco. We closed out our fiscal year with record revenues and record non-GAAP EPS, for both Q4 and FY15. I'm particularly pleased with the strong growth of deferred revenue which shows we are very effectively driving our business to a more predictable software-based business model, at the same time as growing revenues and earnings." He went on to say, "These strong results show what we are capable of when we're focused, and you can expect us to continue to drive the evolution of our portfolio to maximize the value we bring to customers in today's rapidly changing market. The network's strategic role at the center of everything becoming digital – today and in the future – is why I strongly believe Cisco's best years are ahead of us."
Aquistions and divestitures:
During the fourth quarter of fiscal year 2015, Cisco announced an agreement to sell its client premises equipment portion of the company's Service Provider Video connected device unit to French based Technicolor for $600 million in cash and stock. Cisco also announced during the fourth quarter its intent to acquire Cloud-based security company OpenDNS to enhance Cisco's cybersecurity portfolio. This isn't shocking since Cisco CEO said in a interview Wednesday on Mad Money that more cybersecurity acquistions are in Cisco's future.
CEO Chuck Robbins' interview with Mad Money:
Capital return plan
During fiscal year 2015, Cisco returned $4.1 billion to shareholders through its dividend of $0.80/share for the year. The company returned $2.1 billion to shareholders through dividends and stock repurchases in the fourth quarter. Cisco in the fourth quarter purchased 35 million shares under its stock repurchase program at an average price of $28.62/share for a total cost of $1 billion. For fiscal year 2015, Cisco purchased 115 million shares of stock through its stock repurchase plan at an average price of $27.22/share for a total price of $4.1 billion. As of July 25, 2014, Cisco has repurchased and retired 4.4 billion shares at an average price of $20.86/share for a total price of $92.7 billion. Cisco can repurchase another $4.3 billion under its current stock repurchase plan. The company has returned over $90 billion to shareholders through stock repurchases this doesn't include dividend. When you add in dividends over this same time period, Cisco has return over $100 billion to shareholders.
