Cisco reported quarterly net sales of $9.8 billion, net income (GAAP) of $2.1 billion or $0.33 per share, and non-GAAP net income of $2.4 billion or $0.38 per share for its second fiscal quarter ended 26-Jan-2008. This compares with $8.4 billion in net sales a year earlier, an increase of 16.5%. However, citing a slow-down of sales in January and uncertainty in overall economy, Cisco issued a more cautious outlook for the upcoming quarter.
“Cisco delivered another solid quarter with strong revenue and order growth driven by a broad base of geographies, products, services and customer markets. Cisco’s ability to understand market transitions, whether technology or business model-based, continues to be a key contributing factor to our long-term success.” said John Chambers, chairman and CEO, Cisco.
In a conference call, Cisco said that orders slowed in December and January, when the company missed its own internal forecasts. However, Chambers said he did not expect the slowdown to deteriorate further and remains personally optimistic that any downturn would last only a few months.
As for financial guidance, Cisco said it expects 10% revenue growth in Q3 with 65% gross margins. Due to the uncertain business environment at the moment, the company said it could not provide Q4 guidance at this time.
Some highlights from the quarter:
- Growth in Routing revenue (18% y/y) outpaced growth in Switching revenue (11% y/y).
- Sales in Emerging Markets were particularly strong.
- Unified Communications (including WebEx) revenue was up 60% y/y
- Storage revenue was up 30% y/y
- Wireless revenue was up 10% y/y
- Networked home revenue was down 5% y/y
- Security revenue was up 12% y/y
- U.S. Service Provider revenues were up 13% y/y
- Asia Pacific order growth was 23% y/y
- European order growth was up 8% y/y
- Cisco’s headcount at the end of the quarter was 64,087,up from 54,563 a year earlier
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