Cisco's new focus pays off for Q2

Summary:Networking giant Cisco reported a better-than-expected fiscal second quarter, and said that its renewed focus is paying off.

Networking giant Cisco reported a better-than-expected fiscal second quarter, and said that its renewed focus is paying off.

Cisco reported fiscal second-quarter earnings of US$2.2 billion, or 40 cents per share, on revenue of US$11.5 billion. Non-GAAP earnings were 47 cents per share.

Wall Street was looking for earnings of 43 cents per share on revenue of US$11.23 billion.

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 per cent 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 organisation is nearly twice as high when we're talking about business technology and business budgets versus just IT budgets," he said
  • Unified computing system (UCS) sales were up 91 per cent from a year ago; "We added 1786 new UCS customers in Q2, bringing the total to 10,763," he said
  • America's revenue was 54 per cent of revenue, with Europe, the Middle East, Africa and Russia accounting for 29 per cent; Asia, China and Japan were 17 per cent of sales
  • Enterprise revenue grew 7 per cent from a year ago.

By the numbers:

  • Cisco ended the quarter with US$46.7 billion in cash and cash equivalents
  • The company generated US$3.1 billion in cash flow in the second quarter
  • Days of 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.

Via ZDNet US

Topics: Telcos, Cisco, Networking


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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