Updated: Cisco Systems on Wednesday reported fiscal second quarter earnings of $2.1 billion, or 33 cents a share, on revenue of $9.8 billion. Excluding charges, Cisco reported earnings of $2.4 billion, or 38 cents a share.
The results matched Wall Street estimates, according to Thomson Financial. However, most tech watchers were waiting for Cisco's outlook and comments about the third quarter were worrisome.
In a statement, CEO John Chambers reiterated his common refrain: The company is diversified, understands market transitions and is in good shape going forward.
All of that is true, but Cisco is seeing slowing orders. On a conference call, Chambers projected third quarter revenue growth of 10 percent year over year, below projections for long-term growth in the mid-teens. Cisco also said January order growth rates were below expectations and this softness could continue for "a few months." Customers cut back on purchases of routers and switches. Chambers fanned concerns about a slowing economy for the second consecutive quarter.
Bottom line: Cisco isn't hitting its third quarter revenue target of $10.19 billion.
By the numbers:
- Cash flow from operations in the second quarter was $2.4 billion, down from $2.7 billion a year ago.
- Cisco had $22.7 billion in cash and equivalents.
- Days sales outstanding in accounts receivable were 39 days in the second quarter, up from 38 days in the 33 days in the fiscal first quarter.
- Inventory turns were 10.8 in the second quarter, up from 10.3 in the first quarter.
- Cisco had 100 Cisco TelePresence customers in 40 countries.