Logo   | Search
About
Project Feasibility Study
Hardware Design &
Fabrication
Program Development & Debugging
Product Characterization & Correlation


 
   
 
 
Enter
 
Cisco sales, profit soar

One year ago, Cisco Systems CEO John Chambers was cautiously suggesting that a recessionary plunge in tech spending had just about leveled off. Still, he warned analysts at the time that "no one knows" when tech industry sales would recover to a significant degree.

The answer to that question came Wednesday, as Chambers announced that Cisco's sales surged 27 percent in its most recent quarter compared with the same period a year earlier, while profit skyrocketed by 63 percent.

San Jose-based Cisco, the world's largest maker of computer networking equipment, earned $2.2 billion on sales of $10.4 billion for the quarter ended May 1. Earnings beat analysts' expectations and, based on the company's strong sales in markets around the world, Chambers called it one of the strongest quarters in the company's 25-year history.

Cisco said it earned 37 cents a share, or 42 cents a share excluding one-time charges. Analysts polled by Thomson Reuters were expecting earnings of 39 cents a share, excluding one-time charges, on sales of $10.2 billion.

For the current quarter, Cisco is projecting that sales will be 25 percent to 28 percent higher than the same period a year ago.

Cisco is benefiting both from an overall economic recovery and from being the dominant player in the market for network routers and switches, which steer data transmissions across the electronic networks that businesses and consumers increasingly rely on for everyday activities, said Erik Suppiger, a tech analyst with Signal Hill Capital.

Like other big tech companies, Cisco experienced a slowdown in sales last year, as the recession forced many of its corporate customers to cut back spending. But the networking giant has said business began improving in the second half of 2009 and the first months of 2010.

While Chambers said the company increased its market share in its core business of routing and switching gear, Cisco has also been spending heavily to expand in other tech sectors.

Last month, Cisco completed its $3.3 billion purchase of Tandberg, a Norwegian maker of video equipment that will augment Cisco's existing line of high-end "Telepresence" videoconferencing systems.

Also in the past quarter, Cisco introduced the first major upgrade of its Unified Computing System, which includes computer servers and software designed to work in optimum efficiency with its networking gear and other data center equipment. Cisco launched the line last year, in a bid to compete directly with former ally Hewlett-Packard and other big tech companies that sell servers and related gear.

While the company did not release detailed sales results for its new servers, Chambers said Cisco had made sales to more than 900 customers and added that sales are on a pace of about $200 million a year. While that's a small slice of Cisco's overall business, Suppiger said it shows Cisco has found a new market segment in which it can grow and compete. "I would say those are pretty encouraging results," he added.

Cisco also sells a variety of other tech gear, including home networking devices, video cameras, network security products and Internet voice and video systems for business customers.

The company ended the past quarter with 68,574 workers, including 1,700 employees that moved over with Tandberg and about 1,000 new hires, said Chief Financial Officer Frank Calderoni.

Cisco's stock closed Wednesday at $26.74, up 3 percent, but it fell to $26.18 in after-hours trading. Analysts said investors may have been reacting to some of Chambers' remarks about the European economy, in which he said the company is "not abnormally concerned" but is still watching developments carefully.

Source : siliconvalley.com

 
Copyright © ChipTest, All Rights Reserved | Disclaimer
Designed & Developed by Cherry
Home