Cisco posts rising profits and sales
07-02-2007
by Ciara O'Brien

Tech giant Cisco recorded a 40 percent surge in profit for its second fiscal quarter, as increasing demand for video downloads fuelled sales of its IT equipment.

The networking expert, which employs about 60 people in Ireland, saw its net income for the quarter reach USD1.9 billion, compared with USD1.4 billion in the same period of its fiscal year 2006, while earnings per share increased from USD0.22 to USD0.31.

The company also recorded net sales of USD8.4 billion for the quarter, a 27 percent increase on the USD6.6 billion earned a year earlier.

The results were better than analysts' expectations, which predicted revenue in the range of USD8.28 billion to USD8.31 billion.

"Cisco achieved record results that were well balanced across our geographies, products, services, customer segments and new markets," said John Chambers, chairman and CEO, Cisco.

"It is this unique ability to balance between strategy and innovation that has positioned Cisco to take advantage of key emerging business and IT trends such as the rise of video on the network. As the network becomes the platform, we are seeing more and more signs that all forms of IT and communication are moving into the network and increasing the total available market to Cisco."

The quarter also saw Cisco's latest acquisition, Scientific Atlanta which was bought during the third quarter of fiscal year 2006, perform well, contributing net sales of USD639 million.

Company officials said Cisco was pleased with its performance during the quarter. Chief financial officer Dennis Powell said both Cisco and Scientific Atlanta demonstrated continued strength, achieving 18 percent and 21 percent revenue growth year over year respectively.

The strong results follow on Cisco's impressive first quarter results, which saw net sales hit USD8.2 billion, and profit surge to USD1.6 billion. As a result, the company's half year figures showed some impressive growth, with net sales hitting USD16.6 billion, compared with USD13.2 billion in the same period a year before. Net income for the first six months of fiscal 2007 totalled USD3.5 billion, translating into USD0.56 per share, compared with USD2.6 billion or USD0.42 per share for the first six months of fiscal 2006.

The company is continuing its acquisition spree, with plans already announced to buy IronPort Systems, which provides messaging security appliances, focusing on enterprise spam and spyware protection. It has also recently bought Tivella, Orative and Greenfield Networks.

Cisco is also set to increase its staff numbers in Ireland, after its November announcement that it planned to recruit up to 200 people for a new USD40 million R&D centre in Galway.