Cisco Systems reported net sales for its fourth quarter of fiscal 2006 ending 29-July-2006 of $7.98 billion, compared with $6.6 billion for the fourth quarter of fiscal 2005 and compared with $7.3 billion for the third quarter of fiscal 2006. Scientific-Atlanta contributed $582 million to net sales for the quarter.
Net income (GAAP) was $1.5 billion or $0.25 per share, which includes stock-based compensation expense related to employee stock options and employee stock purchases of $152 million, net of tax, or $0.02 per share. Net income prior to fiscal 2006 did not include stock-based compensation expense related to employee stock options and employee stock purchases. Including the pro forma stock-based compensation expense previously disclosed in Cisco’s financial statements footnotes, net income for the fourth quarter of fiscal 2005 was $1.3 billion or $0.20 per share.
Net sales for fiscal 2006 were $28.5 billion, compared with $24.8 billion for fiscal 2005. Scientific-Atlanta contributed $989 million to net sales for fiscal 2006.
Some highlights from the quarterly report:
- Cisco’s core enterprise networking platform, the Cisco Catalyst 6500, surpassed $20 billion in sales to date.
- More than 8 million Cisco Unified IP Phones have been shipped worldwide to date.
- More than 60 service providers have adopted the Cisco Carrier Routing System, or CRS-1, in the first two years since its introduction. Sales are now exceeding $100 million per quarter.
- Cisco’s enterprise customer installed base surpassed the 3 million wireless access points (APs) milestone.
- Q4 sales momentum was “good” and balance was “very good”, with total orders growing in the mid-teens year over year.
- Product gross margin was 65.1% and services gross margin was 66.3%
- Cash flows from operations were $2.3 billion for the fourth quarter of fiscal 2006, compared with $2.4 billion for the fourth quarter of fiscal 2005, and compared with $2.3 billion for the third quarter of fiscal 2006.
- Cash and cash equivalents and investments were $17.8 billion at the end of fiscal 2006, compared with $16.1 billion at the end of fiscal 2005, and compared with $18.2 billion at the end of the third quarter of fiscal 2006.
“From a Cisco standalone product perspective the balance was extremely good across routing, switching, and advanced technologies. Routing revenue grew year-over-year by 12%, switching revenue grew year-over-year by 8%, and advanced technologies’ revenue grew year-over-year by 23%. Of the advanced technologies, storage area networking, unified communications, formerly known as enterprise IP communications, and wireless led the way. We believe we are gaining market share versus almost all of our competitors, but we also believe we are getting a larger share of our customers’ total spend on communications and IT,” said John Chambers, Cisco’s CEO.
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