Have you assessed how the international operations of Cisco Systems (CSCO) performed in the quarter ended January 2025? For this seller of routers, switches, software and services, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

Our review of CSCO's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

For the quarter, the company's total revenue amounted to $13.99 billion, experiencing an increase of 9.4% year over year. Next, we'll explore the breakdown of CSCO's international revenue to understand the importance of its overseas business operations.

Decoding CSCO's International Revenue Trends

APJC generated $1.93 billion in revenues for the company in the last quarter, constituting 13.82% of the total. This represented a surprise of -4.16% compared to the $2.02 billion projected by Wall Street analysts. Comparatively, in the previous quarter, APJC accounted for $2 billion (14.46%), and in the year-ago quarter, it contributed $1.8 billion (14.06%) to the total revenue.

Of the total revenue, $3.86 billion came from EMEA during the last fiscal quarter, accounting for 27.55%. This represented a surprise of +5.07% as analysts had expected the region to contribute $3.67 billion to the total revenue. In comparison, the region contributed $3.59 billion, or 25.92%, and $3.48 billion, or 27.24%, to total revenue in the previous and year-ago quarters, respectively.

Projected Revenues in Foreign Markets

It is projected by analysts on Wall Street that Cisco will post revenues of $14.03 billion for the ongoing fiscal quarter, an increase of 10.5% from the year-ago quarter. The expected contributions from APJC and EMEA to this revenue are 14.5% and 25.9%, translating into $2.03 billion and $3.64 billion, respectively.

For the entire year, the company's total revenue is forecasted to be $56.54 billion, which is an improvement of 5.1% from the previous year. The revenue contributions from different regions are expected as follows: APJC will contribute 14.4% ($8.16 billion) and EMEA 25.9% ($14.64 billion) to the total revenue.

Key Takeaways

Relying on global markets for revenues presents both prospects and challenges for Cisco. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.

We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.

Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.

Cisco currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Examining the Latest Trends in Cisco's Stock Value

The stock has witnessed an increase of 7.7% over the past month versus the Zacks S&P 500 composite's an increase of 4.7%. In the same interval, the Zacks Computer and Technology sector, to which Cisco belongs, has registered an increase of 4.1%. Over the past three months, the company's shares saw an increase of 10.8%, while the S&P 500 increased by 3.1%. In comparison, the sector experienced an increase of 4.1% during this timeframe.

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