Cisco posts rise in profits and revenue
08-08-2007
by Ciara O'Brien

Cisco saw its profit soar 25 percent in the last quarter as continued demand for its internet equipment propped up sales.

Fourth quarter figures showed net income rising to USD1.9 billion, a 25 percent increase on the previous year's USD1.5 billion. This translated into earnings per share of USD0.31. Meanwhile, sales grew to USD9.4 billion, a rise of 18 percent, beating analyst estimates of USD9.22 billion to USD9.37 billion.

Cisco, the world's largest maker of computer-networking equipment, also released its full year figures, with net sales for the year rising 23 percent to USD34.9 billion, and profit for the period hitting the USD7.3 billion mark. Earnings per share for the 12 months were USD1.17, a growth of 31 percent year over year.

"This quarter was the strongest quarter we have seen from a balanced product, geographic and customer segment perspective in many years," said Cisco chief John Chambers.

The results were boosted by growing demand for web equipment, with the convergence of data, voice, video and mobility into IP networks also supporting the firm's financial position.

The company expects demand in this area to continue growing. "As we turn our attention to the next fiscal year, we believe that we are headed into a new era in networking that we define as the second phase of the internet," said Chambers.

"We expect that this phase will be driven by collaboration and Web 2.0 technologies and will become an increasingly influential market trend for businesses. Collaboration has already transformed almost every area of our business internally, resulting in the potential for dramatic gains in productivity and efficiency."

Cisco also saw demand for its Telepresence web conferencing system grow, with the number of orders for the system increasing by more than 400 percent from the third quarter.

The company recently embarked on a round of acquisitions, which saw Scientific-Atlanta added to the Cisco stable in 2006. The firm contributed USD2.8 billion to Cisco's net sales for fiscal 2007, compared with USD989 million for fiscal 2006.

Cisco also recently completed the acquisitions of WebEx Communications, IronPort Systems and BroadWare Technologies. The purchasing activity seems set to continue, with Cisco announcing it plans to invest USD150 million to buy an equity stake in VMware, in a bid to strengthen intercompany collaboration in customer adoption of VMware virtualisation products for use with Cisco networking infrastructure.

Looking ahead, the networking giant is expecting sales for the next quarter to grow by as much as 16 percent.