Cisco Rallies in Q2, Hides Optical
For its second quarter, which ended Jan. 28, Cisco reported net income of $1.4 billion, or 22 per share, on revenues of $6.63 billion, compared with net income of $1.3 billion, 20 cents per share, on revenues of $6.55 billion in the previous quarter.
For its second quarter a year ago, Cisco reported net income of $1.4 billion, 21 cents per share, on revenues of $6.06 billion.
Cisco's non-GAAP net income of 26 cents per share beat analysts' forecasts of 25 cents per share as tallied by Reuters Research . Cisco's revenues were on par with the analyst's forecast of $6.62 billion.
Scuttlebutt prior to Cisco's release focused on third-quarter forecasts, which some felt would be higher than predicted. On a conference call with analysts, CEO John Chambers noted that "Q2 was a very strong order quarter," but didn't blow away expectations.
Cisco expects revenue growth of 10 to 12 percent from last year, translating to third-quarter revenues of $6.81 billion to $6.93 billion. Analysts forecasted revenues of $6.91 billion for Cisco's third quarter.
Still, the numbers put some spark back into Cisco, which disappointed analysts last quarter by providing a tepid forecast. (See Cisco Delivers Mixed Bag.) In after-hours trading, Cisco shares were up 75 cents (4.2%) to $18.84.
Officials reported that Scientific-Atlanta will contribute $250 million in revenues to Cisco's third quarter -- presuming the acquisition is made six weeks before quarter's end -- and $525 million in the fourth quarter.
Chambers snuck in a quick statement about changes in Cisco's optical organization: The company will no longer report optical equipment separately, but will merge it into the categories of routing, switching, and "other." Chambers described the move as "a result of the growing amount of investment we are placing in the integration of optical and packet interfaces into our routing and switching products."
He also confirmed that Cisco intends to decrease its investment in TDM-based optical technology. Signs of this move emerged late last year when Cisco made changes to its optical group, including the hiring of former Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) and Polaris Networks Inc. CEO Surya Panditi, and former Cerent exec Ajaib Bhadare. (See Former Avici CEO Joins Cisco, Cisco Swaps Opto Jobs, and Cisco Taps Cerent Vet.)
— Craig Matsumoto, Senior Editor, Light Reading