Cisco Beats Street; Growth is Flat
The networking giant announced Wednesday that it had beaten Wall Street's expectations for its second quarter of fiscal 2002. However, Cisco's quarterly profits were down from a year ago (see Cisco Officially Reports).
Cisco reported pro forma profits of $664 million, or 9 cents a share, for the period ended January 26, 2002. The company said revenues for the quarter were $4.8 billion. Wall Street analysts had been expecting Cisco to earn 5 cents a share on pro forma revenues of about $4.5 billion.
U.S. enterprise sales were "relatively flat," and its service provider sales continued to decrease, according to Cisco CEO John Chambers.
The company's revenues from optical networking, software, and other miscellaneous products shrank to 9 percent of revenues in Q2 from 11 percent of revenues in Q1, according to Cisco CFO Larry Carter.
Thirty-three percent of the company's Q2 revenues came from router sales.
The company ended the quarter with $5.3 billion in cash and cash equivalents.
Chambers also says that the company's headcount decreased "on a voluntary and involuntary basis" by 760 people during the quarter.
Cisco had already announced some aspects of its earnings this morning, saying that its quarterly earnings exceeded the current consensus estimates of earnings per share and revenues for the second quarter (see Cisco Spills the Beans).
During the year-ago quarter, Cisco reported revenues of $6.75 billion and a pro forma profit of $1.33 billion or 18 cents a share (see Cisco Reports 2Q Results). When excluding one-time charges, Cisco actually earned $660 million or 9 cents a share for this quarter, compared to actual earnings of $874 million or 12 cents a share for the year-ago period.
For the first six months of fiscal 2002, Cisco's actual profits were $392 million, or 5 cents a share, compared with profits of $1.7 billion, or 22 cents a share, for comparable year-ago period.
Blaming limited visibility in their customers' businesses, Cisco only gave financial guidance for one quarter, saying that revenues would be "flat" to up by a "very low single digit increase."
— Phil Harvey, Senior Editor, Light Reading