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 - 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

Navigating the new normal: A fast guide to remote working

A smooth transition will support operations for years to come

Download now

Putting a spotlight on cyber security

An examination of the current cyber security landscape

Download now

The economics of infrastructure scalability

Find the most cost-effective and least risky way to scale

Download now

IT operations overload hinders digital transformation

Clearing the path towards a modernised system of agreement

Download now


software-defined wide area network (SD-WAN)

What is SD-WAN?

8 Jun 2020

Cisco and Sony postpone events due to ongoing protests

2 Jun 2020
chief executive officer (CEO)

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

6 Mar 2020

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

29 Jan 2020

Most Popular


How to find RAM speed, size and type

24 Jun 2020

Microsoft releases urgent patch for high-risk Windows 10 flaws

1 Jul 2020
data protection

EU institutions told to avoid Microsoft software after licence spat

3 Jul 2020