Cisco stock rises on earnings beat, dividend boost and increased buyback
Cisco (NASDAQ:CSCO) shares rose in early trading on Thursday after the networking equipment provider beat earnings expectations, boosted its dividend and added to its stock buyback, prompting some positive commentary from Wall Street.
Bank of America analyst Tal Liani reiterated the firm's buy rating and $68 price target, calling the second-quarter "solid," as better-than-expected margins drove the earnings beat, while the topline was helped by legacy networking spend due to increased infrastructure. 
"Cisco is also seeing accelerated demand from the legacy networking segments benefiting from increased infrastructure spend, which prompts us to reiterate our Buy rating and $68 PO," Liani wrote in a note to investors. 
"Improving growth across legacy and new areas Strong gross margin, at 65.5%, driven by a favorable product mix," the analyst added.
Cisco shares were up more than 3% to $56.09 in premarket trading on Thursday.
In its fiscal second-quarter, Cisco said it earned $0.84 per share on $12.7 billion, compared to estimates of $0.68 per share and $12.68 billion in sales, as double-digit gains overseas drove growth. 
The company meanwhile boosted its dividend by 3% to $0.38 per quarter and added $15 billion to its repurchase authorization, with no fixed termination date. 
It's the third straight quarter where product order growth topped 30%, the company notes. As for business model transformation, it says total annualized recurring revenue was up 11% year-over-year, to $21.9 billion.
For the current quarter, Cisco said revenue should grow between 3-5%, with earnings between $0.85 and $0.87 per share, with analysts expecting the company to earn $0.87 per share.
For the full-year, Cisco said it expects revenue to grow between 5.5% and 6.5%, with earnings clocking in between $3.41 per share and $3.46 per share. Wall Street analysts expect the company to generate 5.9% growth in revenue and $3.42 in earnings per share.
Credit Suisse analyst Sami Badri, who rates shares outperform with a $73 price target, noted the results were "strong," with a "solid beat all-around except for Services revenue growth."
"With increasing revenue visibility in key enterprise customers, growing relevance with webscalers, and guiding to attractive LT revenue/EPS growth, we continue to view [Cisco] as an attractive opportunity at an attractive valuation."