Cisco posted solid second quarter results that were better than expected, but CEO John Chambers said the company continues to see "a challenging economic environment."
The networking giant reported second quarter earnings of $3.1 billion, or 59 cents a share, on sales of $12.1 billion. Non-GAAP earnings were 51 cents a share. Cisco's net earnings were helped by a tax settlement with the IRS and non-GAAP earnings included a tax benefit of a penny a share.
Wall Street was expecting Cisco to report fiscal second quarter earnings of 48 cents a share on revenue of $12.06 billion.
In a statement, Cisco reiterated that it is executing well in a tough market. According to Chambers, the plan is to become the No. 1 IT company in the world.
By the numbers:
Cisco ended the quarter with $46.4 billion in cash, cash equivalents and investments.
The company generated cash flow of $3.3 billion in the quarter.
Cisco closed four acquisitions in the quarter: Cloupia, Meraki, Cariden Technologies and BroadHop.
Product revenue was $9.44 billion in the second quarter. Service sales were $2.66 billion.
Inventory turns were 11.6 in the quarter, up from 11.1 a year ago.
UPDATE: During the quarterly conference call on Wednesday afternoon, Cisco executives provided third quarter guidance of revenue growth between four and six percent percent on a year-over year basis with non-GAAP earnings of 48 cents to 50 cents per share.
For the third quarter, Wall Street is expecting Cisco to report earnings of 49 cents a share on revenue of $12.22 billion.