Light Reading

Cisco Revenue Down 19% in Europe

Craig Matsumoto
News Analysis
Craig Matsumoto
11/13/2012
50%
50%

Europe was a sore spot for Cisco Systems Inc. (Nasdaq: CSCO) in the company's first quarter and will "get worse before it gets better," CEO John Chambers said on Tuesday's earnings call.

It's the one blemish on an otherwise sunny outlook, as Cisco saw business recovering in other geographies and most of its business segments. (See Cisco Nets $2.1B in a Predictable Q1.)

Cisco's revenues from European service providers were down 19 percent compared with last year's first quarter, Chambers said. (Cisco's first quarter ends in October.)

Cisco's revenues from U.S. service providers were up 13 percent from a year ago. But worldwide, the company's service-provider sales were up only 3 percent.

Most other categories saw growth for Cisco, especially the U.S. enterprise market, which was up 9 percent. The big downer was the U.S. federal market, which dipped 15 percent in the first quarter, compared with the same quarter a year ago. Cisco expected that one, though, Chambers said.

Overall, Cisco expects revenues for its second quarter, which ends in January, to be $11.93 billion to $12.16 billion. The midpoint of that range would be $12.05 billion, which is just better than the $12.02 billion that analysts were expecting, according to Thomson Reuters .

Separately, Chambers made a sidelong reference to the increasing friction between the U.S. and China, noting that Cisco still counts China as a buddy. "We have invested a lot of resources and innovation in China for the last 20 years, and our commitment to China has not diminished in any way," he said. (See China Lashes Out at 'Cold War Mentality', Cisco Feels Security Heat in China and US vs Huawei/ZTE: The Verdict.)

— Craig Matsumoto, Managing Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:17:44 PM
re: Cisco Revenue Down 19% in Europe


Sigint -- It's a lack of money. Budget cuts, budget freezes.

sigint
50%
50%
sigint,
User Rank: Light Beer
12/5/2012 | 5:17:44 PM
re: Cisco Revenue Down 19% in Europe


"The US federal sector was also way off, down 15% year over year, but everyone was pretty much expecting that."


________________________________________________________________


 


Could you please elaborate on factors dampening federal sector sales? 

Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:17:44 PM
re: Cisco Revenue Down 19% in Europe


One thing that seemed to bug analysts on the call was Cisco's gross margins, which have improved but are due to dip back next quarter (to 61-62%, vs. 62.7% in Q1).  Cisco's explanation was that it had to do with the mix of sales.


The US federal sector was also way off, down 15% year over year, but everyone was pretty much expecting that.

Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (4) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
LRTV Huawei Video Resource Center
Thailand's AIS: Transforming to an FMC Operator

7|17|15   |   4:53   |   (0) comments


Saran Phaloprakarn, Senior VP of Fixed Broadband Business Management of Thailand's AIS, was a keynote speaker at the first Asia-Pacific Ultra Broadband Summit in Bangkok. In this video, he talks to Heavy Reading about transforming into an FMC (FBB+MBB+Content) operator.
LRTV Huawei Video Resource Center
Cambodia's TRC Discusses Its Plans for National Broadband

7|17|15   |   10:33   |   (0) comments


In this video, Chakyra Moa, Chairman of Telecommunication Regulator of Cambodia (TRC), talks in in-depth with Heavy Reading about the Cambodia's current telecom market and TRC's goals and expectations for the future.
LRTV Documentaries
5G Phone

7|16|15   |   2:09   |   (4) comments


A man has an opportunity to purchase the world's first working 5G phone. Imagine the possibilities...
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Network operators start seeing savings from NFV in the first year, according to a study by Affirmed Networks and ACG.
Hot Topics
AT&T U-verse TV Hits the Skids
Alan Breznick, Cable/Video Practice Leader, 7/24/2015
Robbins Succeeds Chambers as Cisco Changes CEOs
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/27/2015
RJio to Launch Its Own 4G Devices Brand
Gagandeep Kaur, Contributing Editor, 7/27/2015
Qualcomm Wants FCC to Stay Out of LTE-U Fray
Sarah Thomas, Editorial Operations Director, 7/27/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
Cats with Phones
Distract-a-Cat Click Here
The vibrate function makes for a useful cat distraction.