Cisco Systems reported quarterly income of $4.6 billion, down by 4.2% compared with $4.8 billion for the same period last year and compared with $4.7 billion for the preceding quarter. Despite the decrease in overall revenue, Cisco described the quarter as “solid” in profit, net income and gross margins. Operating cash flow was $1.26 billion and earnings per share were $0.14 GAAP or $0.15 pro forma. Regarding overall market conditions, Cisco CEO John Chambers said he is “slightly more optimistic” than he was three months ago. Some highlights for the quarter include:
- pro forma gross margins continued to improve to 70.8%, compared to 63.1% last year
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geographically, the U.S. accounted for 45% of total product orders, EMEA was 32% and Asia-Pacific was 10%.
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revenue guidance for the next quarter was given as “flat,” compared with “flat to down slightly” three months ago
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Cash and total investments were over $20.3 billion at the end of the quarter
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During the quarter, Cisco repurchased approximately $2.0 billion of common stock
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In the service provider segment, Cisco noted continued caution and the prospect of further CAPEX cuts
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regarding the expensing of stock options, John Chambers said he feels very strongly that employee ownership is a vital principle for the vitality of the IT industry. Without stock options, he predicts a major job loss in the US, as the industry competitiveness flows to Asia. He said 80% of Cisco stock grants go to rank-and-file employees.
An archived webcast of the company’s quarterly conference call is online.
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