Cisco Systems CEO John Chambers said the company saw some return to normalcy during the fourth quarter specifically a "dramatic difference" from the large swings in order patterns from quarter to quarter that the company had been seeing during the year's first three quarters.
But in a call with analysts today, he warned investors not to get ahead of themselves by some good news and stressed that he was not yet ready to declare a bottom to the economic instability - and would want to see positive signs for several more quarters before doing so.
With that said, the company reported fourth quarter income of $1.8 billion, or 31 cents per share, on revenue of $8.5 billion, an 18 percent decrease from a year ago but largely expected. Wall Street had been expecting earnings of 28 cents per share and sales of $8.5 billion. For the fiscal year, the company reported income of $8 billion, or $1.35 per share, on sales of $36.1 billion, down nearly 9 percent from the year ago quarter. (Statement)
In a statement, CEO John Chambers said:
Cisco delivered very solid quarterly and annual results in a challenging economic environment, as we continued our focus on disciplined execution and our customers' success. We are confident in our strategic position in both existing and thirty adjacent markets. We saw a number of positive signs this quarter in the economy and in our business, especially comparing our sequential quarter-over-quarter order trends. If we continue to see these positive order trends for the next one to two quarters, we believe there is a good chance we will look back and see that the tipping point occurred in our business in Q4.
While analysts weren't expecting blow-me-away results, they are hopeful that enterprise spending may be rebounding. The company said it expects first quarter revenue to decline 15-17 percent from the same quarter a year ago. Considering that last year's Q1 sales of $10.3 billion were up more than 8 percent from the year prior, a decrease of 15-17 percent isn't terrible - again, taking the instability of global economics into consideration.
The company also said it was done with the previously-announced workforce reduction and resource re-allocation efforts - which left the company with about 2,000 fewer employees - and is now focused on a growth strategy.
Shares of Cisco were down 1.2 percent in regular trading, closing at $22.17. Shares fluctuated in after-hours trading - with a brief decline following Chambers' announcement of Q1 guidance.