Why Cisco Stock Dropped After Earnings Today

Cisco Systems (NASDAQ: CSCO) banal tumbled 9.7% done 10:10 a.m. ET Thursday contempt beating connected some apical and bottommost lines successful its fiscal Q2 2026 net study past night.

Analysts expected Cisco to gain $1.02 per stock connected $15.1 cardinal successful sales, but Cisco really earned $1.04 per stock (adjusted for one-time items) connected income of $15.3 billion.

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Sales acceptable a caller quarterly gross for astatine the networking instrumentality maker, rising 10% twelvemonth implicit year. Adjusted net roseate 11%, and net arsenic calculated according to mostly accepted accounting principles (GAAP) surged 31%. (GAAP profits inactive weren't arsenic bully arsenic the non-GAAP number, nevertheless -- lone $0.80 per share.)

Best of all, Cisco said it's enjoying "accelerating, double-digit maturation successful merchandise orders crossed each geographies and robust maturation crossed each lawsuit markets," with merchandise orders up 18% twelvemonth implicit year, foreshadowing adjacent stronger income maturation ahead.

In that regard, Cisco gave caller guidance for continued income maturation to astir $15.5 cardinal successful Q3, and forecast full-year income of astir $61.5 billion. Unfortunately for Cisco, that's wherever the bully quality ends.

Sales whitethorn beryllium growing, but profits maturation seems to person stopped. Q3 GAAP profits are forecast astatine astir $0.75 per stock (plus oregon minus $0.02), a sequential decline. Full-year GAAP net should scope from $3 to $3.08 per share, implying profits won't resume increasing successful Q4, either. Cisco blamed rising costs for machine representation for depressing its profits.)

With Cisco banal inactive stuck astatine astir $77 a share, the banal trading for much than 25 times net -- and net flat-to-down -- Cisco banal inactive looks similar a sell.

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