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Shares of Cisco Systems  (CSCOFree Cisco Systems Stock Report) are up modestly in trading today after the networking equipment and software provider reported better-than-expected results for the October period.

Revenue of $13.1 billion grew 8% year over year, greater than our 4% estimate. Total product sales (75% of the top line) were up 9%, Service revenue grew 3%, and product orders advanced 8%. Adjusted earnings per share came in at $0.75, $0.03 more than our forecast and 23% above the prior year's tally.

Taking a look at Cisco's individual businesses, Infrastructure Platforms grew revenue 9% in the quarter. Switching demand has been healthy thanks largely to blockbuster sales of Catalyst 9000 switches. The company recently launched the 9200, which extends intent-based networking (software that identifies services to run and how the network should configure accordingly) to entry-level customers, and the 9800, a wireless controller that can be used for enhanced security automation and analytics. Too, it unveiled the Nexus 400-gig switch, which aims to help service providers and web-scale content players increase bandwidth and scale. Encouragingly, the routing subcategory returned to growth thanks largely to a 2% advance in revenues from service providers. Wireless products had double-digit revenue gains owing largely to the Wave 2 and Meraki lines. Further, solid data center growth was driven by HyperFlex, the company's hyperconverged infrastructure solution.

On the software side, the Applications unit increased its top line 18%, thanks to Unified Communications and TelePresence. Notably, 95% of Fortune 500 companies are said to use the company's collaboration solutions. Also contributing to growth was the newly-acquired AppDynamics which uses application monitoring and analytics to improve customers' business outcomes and agility.

Meanwhile, the Security division posted double-digit revenue growth, as the need for secure virtualized infrastructure is increasing. The recent $2.35 billion cash purchase of Duo Security is encouraging. That outfit provides cloud-based identity solutions for easier security access and multi-factor identification.

Cisco is forecasting fiscal second-quarter revenue to grow 5%-7% year over year, while earnings per share should land between $0.71 and $0.73, in line with our $0.73 call.

Overall, we were pleased with Cisco's recent results. It appears that the company's customers are realizing the value of integrating various networking functions over decoupled, open components combined to form a network, i.e. disaggregation. In addition to the security benefits of using the same vendor, Cisco claims to be able to connect any user, on any device, on any network, to any application, running anywhere. We think Cisco's value proposition is attractive and still think there is some room to run for these high-quality shares. 
 About The Company: Cisco Systems Incorporated is a leading provider of Internet Protocol-based networking and other products for transporting data, voice, and video across geographically dispersed local-area networks, metropolitan-area networks, and wide-area networks. Devices are primarily integrated by Cisco IOS Software and include Routers, Switches, New Products, and Other. Provides services associated with these products.

About The Company: Cisco Systems Incorporated is a leading provider of Internet Protocol-based networking and other products for transporting data, voice, and video across geographically dispersed local-area networks, metropolitan-area networks, and wide-area networks. Devices are primarily integrated by Cisco IOS Software and include Routers, Switches, New Products, and Other. Provides services associated with these products.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.