Cisco's Q3 Hits the Flats
In fact, pro forma net income of 38 cents per share was better than analysts' expectations by 2 cents, according to Reuters Research . (See Cisco Reports Q3.) Cisco famously tends to beat estimates by 1 cent.
Still, revenues were down slightly, as expected. Cisco had warned that product order growth had stalled very early in the year, which was likely to create problems for at least one quarter. (See Cisco Sounds Warning Bells.)
For its third quarter, which ended April 26, Cisco reported revenues of $9.79 billion and net income of $1.8 billion, or 29 cents per share, compared with the previous quarter's revenues of $9.83 billion and net income of $2.06 billion, or 33 cents per share.
For its third quarter a year ago, Cisco reported revenues of $8.87 billion and net income of $1.87 billion, or 30 cents per share.
Cisco shares were up $0.66 (2.5%) to $26.98 in early after-hours trading.
As promised, the U.S. enterprise market was a downer for Cisco, with order growth in the mid-single digits compared with last year's third quarter. "We are continuing to see our U.S. and some European custs remain cautious in their views about their own economies," Chambers said on today's conference call with analysts.
Cisco is predicting fourth-quarter revenues of $10.28 billion to $10.38 billion -- growth of 9 to 10 percent over the previous year -- which matches the analyst consensus forecast of $10.3 billion.
Chambers continued to hedge his bets about how long it might take to return to strong growth. "We remain comfortable with our long-term growth objectives" of 12 to 17 percent per year in sales, he said. But he added that it's unclear how long it will take for growth to come back strong. "Our best estimate is that this is a relatively short-term challenge."
On the plus side, business in Asia continues to do well. Cisco reiterated what Juniper Networks Inc. (NYSE: JNPR) said about Japan -- that business is picking up there as another wave of buildouts gets rolling. (See Juniper Sails Through Q1.) Orders taken from Japan increased more than 20 percent compared with the third quarter last year.
— Craig Matsumoto, West Coast Editor, Light Reading