Cisco sees revenue and profit jump
07-05-2008
by Bryan Collins

Cisco posted better-than-expected third quarter results with a 10.4 percent year-on-year increase in revenue.

The world's largest network equipment maker announced that its third quarter net sales reached USD9.8 billion, slightly ahead of the USD9.75 billion Wall Street analysts had expected and up on the USD8.9 billion posted during the same quarter last year. Analysts said it was a sign that the shaky US economy has not hit the company as hard as had been feared.

"We are very pleased with our performance for the third quarter in which we delivered 10 percent year-over-year top-line growth," said Frank Calderoni, chief financial officer with Cisco. "Our ability to deliver solid financial results, excellent cash flow, and a strong balance sheet during a quarter of somewhat uncertain macro-economic conditions, illustrates the power of our business model."

Net income amounted to USD1.8 billion, based on generally accepted accounting principles, down 5.4 percent on the same period last year. This was in part due the company's acquisition of the remaining 20 percent shares in start-up Nuova Systems it didn't already own at the beginning of April. Cisco's third quarter GAAP earnings per share dipped 3.3 percent, from the same period last year, to USD0.29.

The company said net sales for the first nine months of fiscal 2008 were USD29.2 billion, compared with USD25.5 billion for the first nine months of fiscal 2007. Its net income for the first nine months of fiscal 2008, based on GAAP, was USD6 billion or USD0.97 per share, compared with USD5.4 billion or USD0.86 per share for the first nine months of fiscal 2007.

"In the quarter, Cisco delivered solid financial results driven by our focus on innovation, our broad and growing global footprint, and our teams' focus on delivering results," said John Chambers, chairman and CEO of Cisco. "We believe that our steady performance is based on Cisco's unique balance across business and technology architectures and our continued focus on execution against our long-term strategy."

Cisco's figures were slightly above expectations and it provided a guidance figure of 9 to 10 percent sales growth for its fourth quarter -- which matched analyst estimates. Cisco's shares rose 1.1 percent to USD26.62 during after hours trading following its results announcement.