Networking giant Cisco reported a better-than-expected fiscal second quarter and said its renewed focus is paying off.
Cisco reported fiscal second quarter earnings of $2.2 billion, or 40 cents a share, on revenue of $11.5 billion. Non-GAAP earnings were 47 cents a share.
Wall Street was looking for earnings of 43 cents a share on revenue of $11.23 billion.
As for the outlook, Cisco projected non-GAAP earnings of 45 cents a share to 47 cents a share. Wall Street was expecting earnings of 45 cents a share.
In a statement, Cisco CEO John Chambers was upbeat about the company's execution. "Our operational focus continues to yield positive results -- we hit our billion dollar expense reduction a quarter early -- and our ongoing innovation enables our customers to solve their critical business needs. You will continue to see a focused and aggressive Cisco," said Chambers.
On a conference call with analysts, Chambers made the following points:
- "We appear to also be gaining an increasing share of our customers' total spend on IT as evidenced by our revenue growth versus many of our peers and competitors," he said.
- Cisco appears to be gaining share at the expense of others.
- Total product orders were up 7 percent in the second quarter compared to a year ago.
- Cisco is closing more deals since it has broken down product silos. "The close rate in this business in terms of the pipeline of the sales organization is nearly twice as high when we're talking about business technology and business budgets versus just IT budgets," he said.
- Unified computing system sales were up 91 percent from a year ago. "We added 1,786 new UCS customers in Q2, bringing the total to 10,763," he said.
- Americas revenue was 54 percent of revenue with Europe, Middle East, Africa and Russia accounting for 29 percent. Asia, China and Japan were 17 percent of sales.
- Enterprise revenue grew 7 percent from a year ago.
By the numbers:
- Cisco ended the quarter with $46.7 billion in cash and cash equivalents.
- The company generated $3.1 billion in cash flow in the second quarter.
- Days sales outstanding for the second quarter were 31 days.
- Inventory turns were 11.1 in the second quarter, up from 10.6 in the same quarter a year ago.