x
Optical/IP

Cisco Q4 Hides a Frown

Shares of Cisco Systems Inc. (Nasdaq: CSCO) are down 6 percent after-hours, as the company didn't wow the world with fourth-quarter earnings or first-quarter projections.

Cisco's earnings pretty much met analysts' expectations, with revenues of $10.84 billion and non-GAAP net income of 43 cents per share for the fourth quarter, which ended July 31.

For its first quarter, though, Cisco expects revenues to be 18 to 20 percent higher than a year earlier. That translates to $10.64 billion to $10.83 billion, versus the analyst consensus of $10.95 billion reported by Thomson Financial .

In other words, Cisco expects revenues to shrink this quarter.

Cisco CEO John Chambers, amid his usual happy-go-lucky patter, noted on today's earnings call that the company is worried about worldwide GDP growth and projections; job levels; and Europe in general. (No specifics on that last one, as of this writing.)

Chambers also said Cisco's customers would agree with the Federal Reserve in believing the economic recovery has slowed "and is likely to be more modest in the near term than was anticipated."

That's somber compared with last quarter, which was all rainbows and unicorns. (See Cisco Q3: Best. Quarter. Ever. )

Delays in product shipments have been an ongoing problem. Cisco says it's gotten lead times under control for most of its customers but is still seeing shortages in the components it buys. CFO Frank Calderoni said that situation could linger through December.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:27:02 PM
re: Cisco Q4 Hides a Frown

Chambers, on the conference call, is adamant about this being a great quarter and all. But there are a lot of things to worry about for Q1, and the guidance was anemic. It sounds like this is not being well received.

paolo.franzoi 12/5/2012 | 4:27:01 PM
re: Cisco Q4 Hides a Frown

 


Naw clearly it is a downturn related to competition with Adtran.


(NOTE: THE CROSS POST HUMOR!!!)


 


seven


 

Stevery 12/5/2012 | 4:27:01 PM
re: Cisco Q4 Hides a Frown

In other words, Cisco expects revenues to shrink this quarter.


He also said something much more profound:  GDP was going to slow down over the next 2 Qs.  That means more than Cisco revenue is going to be shrinking.


Not cool.


Pete Baldwin 12/5/2012 | 4:27:00 PM
re: Cisco Q4 Hides a Frown

I declare Brookseven's post to be awesome.

Pete Baldwin 12/5/2012 | 4:27:00 PM
re: Cisco Q4 Hides a Frown

OK, yes. That would be bad on a bigger scale.

rjmcmahon 12/5/2012 | 4:26:54 PM
re: Cisco Q4 Hides a Frown

I've been working in enterpise cubicles for a few decades and the Cat5 jacks have been connected to 100Mbs for over 10 years now.  There really hasn't been a productivity need to go to 1Gbs to the desktop.   (VNC to the data center works fine over 100Mbs.)  


On the service provider side, we're constrained by access networks plus the issue that service providers rationalize CAPEX based upon returns and not productivity.  Plus, milking the cash cow means keep access bw scarce.


So that leaves data centers (servers to servers/servers to storage) which may not be as large of a market as suggested by the slow adoption of things like 10G.

DCITDave 12/5/2012 | 4:26:54 PM
re: Cisco Q4 Hides a Frown

I thought people spent more on tech when times were tough. Trying to wring more efficiency out of their organizations and all.


(Just remembering some Cisco conf call rhetoric from years past, I guess.)

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE