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.