Cisco Reports Solid Q3
For its third quarter, ended April 28, Cisco reported net income of $1.9 billion, or 30 cents per share, on revenues of $8.9 billion, compared with net income of $1.9 billion, or 31 cents per share, on revenues of $8.4 billion the previous quarter. (See Cisco Reports Q3.)
For its third quarter a year ago, Cisco reported net income of $1.4 billion, or 22 cents per share, on revenues of $7.3 billion.
Cisco's non-GAAP earnings of 34 cents per share beat analysts' estimates by a penny, according to First Call .
Cisco said it expects fourth-quarter revenues to be 15 to 16 percent higher compared with a year ago -- aggressive, considering Cisco is still forecasting long-term growth of 10 to 15 percent.
But the forecast, which would put fourth-quarter sales between $9.2 billion and $9.3 billion, was only on a par with analysts' average prediction of $9.23 billion. Investors may have wanted more; Cisco shares, which had climbed 8 percent in the past two months, were down $1.48 (5.2 percent) at $26.88 in early after-hours trading.
The coming wave of Web 2.0 technologies is going to fuel the next wave of Internet usage among businesses, CEO John Chambers predicted on today's earnings call with analysts. Cisco's newly formed Media Solutions Group is dabbling in this area, although its only overt moves so far have been the acquisitions of Five Across and Tribe.net. (See Cisco Adds to Social Stockpile.)
Along similar lines, Cisco's more adventurous bets are showing signs of paying off, as its videoconferencing (TelePresence), security, and digital signage units doubled their revenues between the second and third quarters.
"This indicates a very positive momentum that even the fastest growing startups would love to have," Chambers said, while conceding these businesses are starting from small bases.
In a week when The Cable Show is going on, Scientific Atlanta enjoyed what Cisco officals said was its highest quarter of sales ever. Scientific Atlanta now represents nearly 10 percent of Cisco's product revenues, Chambers said.
— Craig Matsumoto, West Coast Editor, Light Reading