Ordering patterns during Cisco's fourth quarter, which ended July 25, looked almost normal, CEO John Chambers said on this afternoon's earnings call. That's in contrast to other recent quarters, where monthly order levels, compared with the same month the previous year, kept worsening. (See Cisco Predicts Q2 Plunge and Cisco's Still Sinking.)
"While it is too early to say that this is a definite trend... the sequential numbers were solid and more in line" with normal business than at any time during the past 12 months, Chambers said.
He added, though, that he wants to wait a couple of quarters before declaring that business has returned to normal. Darn.
Chambers might have good reason to be cautious. Analyst Catharine Trebnick of Avian Securities LLC wrote in a research note yesterday that Cisco's orders were below plan in May, but improved in July to pick up the slack.
Overall, Cisco didn't bring any big surprises with its revenues and earnings as measured by generally accepted accounting principles (GAAP). (See Cisco Reports Q4.)
Table 1: Cisco's Q4
| 4Q08 | 4Q09 | Change (%) | |
| Revenues ($B) | 10.36 | 8.53 | -18% |
| Net Income ($B) | 2.0 | 1.1 | -46% |
| EPS ($) | 0.33 | 0.19 | -42% |
| Share Price ($) | 22.65 | 22.17 | -2% |
| Source: Cisco All figures GAAP | |||
(As a side note: In that fourth quarter a year ago, Cisco reported the highest revenues in its history. How's that for a tough comparison?)
Sales were down almost exactly as much as Wall Street expected. But the non-GAAP earnings were 2 cents better than estimates.
Table 2: Cisco vs. Analysts
| Analysts' Consensus Estimate, 4Q09 |
Actual 4Q09 | |
| Revenues ($B) | 8.51 | 8.53 |
| EPS, non-GAAP ($) | 0.29 | 0.31 |
| Net Income, non-GAAP ($B) | 1.65 | 1.83 |
| Source: Cisco, Thomson Reuters | ||
For its first quarter, which ends in October, Cisco is predicting revenues of $8.57 billion to $8.78 billion, or 15 to 17 percent less than the previous year's first quarter. That could be taken as good news; analysts polled by Thomson Reuters were expecting first-quarter revenues of $8.59 billion.
Cisco shares traded up 43 cents (1.9%) at $22.60 each in early after-hours trading.
Cisco is still talking about reducing expenses. The company still says it's not doing a major layoff, but minor layoffs continue. The number of jobs cut during the second half of the year will exceed the 1,500 to 2,000 Cisco already announced, Chambers said. (See Cisco: Still No Layoffs, Cisco Awaits the Hammer, and Nortel/Cisco Updates .)
In the Random Fun Facts category, Chambers reported that one enterprise customer has committed to buy $1 million worth of Flip cameras, the doodads Cisco picked up with the acquisition of Pure Digital. (See Cisco's Latest Buy: Flippin' Sweet.)
— Craig Matsumoto, West Coast Editor, Light Reading
These numbers are in line, but frankly, I think CSCO's growth days are so behind it. With broad and elected competition from and against its former partners and its lack of competitive service and consultant business CSCO is still a reliable bell weather, but hardly a dynamic juggernaut. IBM, Google are juggernaut's.
Chambers has done a great job for nearly two decades, but growing significant revenue from here while maintaining quality margins, is a long shot to say the least. IBM, as example is just amazing, but good luck to CSCO. They will provide us with pulse as Juniper, Brocade go after marketshare and as they, CSCO try to figure out how to grow further.
Perhaps its time to merge with Accenture