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
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
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Interviews
DT's Virtualization Vision for Europe

3|4|15   |   10:23   |   (0) comments


Light Reading CEO Steve Saunders talks virtualization, cloudification and standards with Deutsche Telekom's Axel Clauberg at Mobile World Congress.
LRTV Custom TV
ZTE's Wireline at MWC 2015

3|4|15   |   6:35   |   (0) comments


Light Reading speaks with Jane Chen, ZTE's Senior VP of Wireline Business, about innovations in her product line at Mobile World Congress.
LRTV Custom TV
ZTE at MWC 2015

3|4|15   |   4:24   |   (0) comments


Dr. Dick Chen of ZTE USA gives Light Reading an overview of what's new at ZTE's pavilion at Mobile World Congress 2015.
LRTV Interviews
Ericsson CEO Talks Telco Data Center Tech

3|4|15   |   05:45   |   (0) comments


At Mobile World Congress, Ericsson CEO Hans Vestberg discusses telco data center technology, business models, small cells and more.
Between the CEOs
EXCLUSIVE: Cisco's Chambers on Reinvention

3|3|15   |   8:24   |   (1) comment


Light Reading CEO Steve Saunders talks transformation and virtualization – including Light Reading's independent testing of the vendor's virtualization solutions – with Cisco CEO John Chambers at Mobile World Congress in Barcelona.
LRTV Documentaries
The Three Cs of MWC15

3|2|15   |   2:33   |   (1) comment


My visit to this year's Mobile World Congress is going to dominated by three Cs – cloud, cells and coffee.
LRTV Huawei Video Resource Center
Huawei Shares Its Vision of the Future of Mobile Networks Innovations

2|26|15   |   2:30   |   (0) comments


Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
LRTV Huawei Video Resource Center
Accelerate Digitizing, Boost Digital Business

2|26|15   |   6:14   |   (0) comments


A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
LRTV Huawei Video Resource Center
The Secret Recipe to Enabling Hyper-Growth Industries

2|26|15   |   3:38   |   (0) comments


With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
LRTV Documentaries
BTE 2015 Is Bigger & Even Better

2|25|15   |   03:13   |   (4) comments


This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
LRTV Interviews
Light Reading ICT Leaders Roundtable at MWC 2015

2|12|15   |   1:07   |   (2) comments


On Sunday March 1, 2015, Light Reading will host an ICT Leaders Roundtable in partnership with Huawei. At this half-day event, CIOs, analysts and researchers will discuss key industry trends like virtualization in the cloud with a specific focus on new business models. Located at the luxurious Renaissance Hotel near the Fira Barcelona, space is limited so please ...
LRTV Documentaries
Going Green in 2015

2|12|15   |   02:04   |   (0) comments


Energy efficiency is set to be an incredibly hot topic in the telecom industry this year.
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Internet Pioneers Decry Title II Rules
Carol Wilson, Editor-at-large, 3/2/2015
Wheeler: We'll Enforce Title II 'Case-By-Case'
Sarah Thomas, Editorial Operations Director, 3/3/2015
Verizon Takes Radio Dot to Detroit, VoLTE Overseas
Sarah Thomas, Editorial Operations Director, 2/27/2015
FCC Adopts Title II Rules
Alan Breznick, Cable/Video Practice Leader, 2/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.