Cisco posts bumper results amidst restructure

The networking giant impresses analysts with solid profit and record revenue.

Graph up

Cisco appears to have turned a corner after posting record revenue alongside solid profit growth in the company's second quarter results.

Net profits rose 43.5 per cent reaching $2.2 billion (1.3 billion) for the three months leading up to 28 January. Sales figures hit $11.5 billion.

The networking giant had a turbulent 2011, a year in which there were widespread job cuts and a major strategic refocus, although the company's UK CTO recently told IT Pro no more employees would be sent packing in 2012.

Advertisement - Article continues below

We are executing well on our three-year plan to drive earnings faster than revenue.

Products including Flip cameras and the umi home videoconferencing have been ditched along the way, after Cisco decided to turn back on its foray into the consumer sphere.

The company had repeatedly disappointed investors, but in the past few months Cisco has performed considerably better.

The results hinted at weaknesses in public sector buying power, largely thanks to austerity plans of Governments across the world, CEO John Chambers revealed in a conference call. Yet the company's core products, including switches and routers, brought in plenty of revenue.

Cisco's switching business saw eight per cent revenue growth. Switching gross margins have returned to where they were two years ago, again hinting the company is getting back to what it's best at. Routing also grew eight per cent in revenue.

Advertisement
Advertisement - Article continues below

"We are executing well on our three-year plan to drive earnings faster than revenue. 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," Chambers said.

Advertisement - Article continues below

"You will continue to see a focused and aggressive Cisco that is helping our customers use intelligent networks to transform their businesses."

The company is also making gains in the data centre, with its UCS servers acquiring 10,000 customers overall, with 3,000 in Europe.

Cisco has been benefitting from competitive weakness too, with Juniper Networks' fourth quarter results showing revenue below expectations and net income falling to $96.1 million from $190.2 million the year previous.

Read on for our Q&A with Cisco's vice president for enterprise Laurent Blanchard.

Featured Resources

Top 5 challenges of migrating applications to the cloud

Explore how VMware Cloud on AWS helps to address common cloud migration challenges

Download now

3 reasons why now is the time to rethink your network

Changing requirements call for new solutions

Download now

All-flash buyer’s guide

Tips for evaluating Solid-State Arrays

Download now

Enabling enterprise machine and deep learning with intelligent storage

The power of AI can only be realised through efficient and performant delivery of data

Download now
Advertisement

Recommended

Visit/business-strategy/chief-executive-officer-ceo/354935/western-digital-hires-ciscos-david-goeckeler
chief executive officer (CEO)

Western Digital hires Cisco’s David Goeckeler as its new CEO

6 Mar 2020
Visit/business-strategy/collaboration/354660/cisco-webex-will-use-voice-tools-to-exploit-next-frontier-of
collaboration

Cisco WebEx will use voice tools to exploit ‘next frontier’ of data insights

29 Jan 2020
Visit/infrastructure/network-internet/354658/paessler-prtg-network-monitor-194-review-outstanding-cloud
Network & Internet

Paessler PRTG Network Monitor 19.4 review: Outstanding cloud monitoring

29 Jan 2020
Visit/infrastructure/network-internet/354629/what-to-expect-from-cisco-live-2020
Network & Internet

What to expect from Cisco Live 2020

24 Jan 2020

Most Popular

Visit/infrastructure/server-storage/355118/hpe-warns-of-critical-bug-that-destroys-ssds-after-40000-hours
Server & storage

HPE warns of 'critical' bug that destroys SSDs after 40,000 hours

26 Mar 2020
Visit/software/video-conferencing/355138/zoom-beaming-ios-user-data-to-facebook-for-targeted-ads
video conferencing

Zoom beams iOS user data to Facebook for targeted ads

27 Mar 2020
Visit/cloud/355098/ibm-dedicates-supercomputing-power-to-coronavirus-researchers
high-performance computing (HPC)

IBM dedicates supercomputing power to coronavirus research

24 Mar 2020
Visit/software/355113/companies-offering-free-software-to-fight-covid-19
Software

These are the companies offering free software during the coronavirus crisis

25 Mar 2020