Cisco reports solid earnings but choppy outlook

Summary:The company has delivered solid financial results for its first quarter, but has expressed concerns about how public-sector spending cuts may impact on its outlook

Cisco delivered solid first-quarter earnings this week, while citing concerns about how government cutbacks will affect its business.

The company reported first-quarter net income of $1.9bn (£1.18bn), or 34 cents a share. First-quarter revenue was $10.75bn, up 19.2 percent from a year ago. Wall Street analysts were expecting earnings of 40 cents a share on revenue of $10.74bn. In a statement, Cisco's chief executive John Chambers said he was pleased with the company's "solid financial results, during a challenging economic environment".

However, in a call with analysts, Chambers was clear about the "challenges" that the company is facing, notably government spending, service providers and the European market. Globally, orders in the public-sector segment were up six percent and growth in US federal government spending and emerging markets was "solid". Orders from US state governments, however, were down about 25 percent. Likewise, European governments have seen their budgets "reduced dramtically".

For more on this ZDNet UK-selected story, see Cisco earnings: Challenges multiply, outlook disappoints on ZDNet.com.

Topics: Tech Industry

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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