Cisco Posts Record Results, Remains BullishCisco Posts Record Results, Remains Bullish
Cisco CEO John Chambers boasted on an earnings call that Cisco is gaining market share against almost all its competitors and total orders are growing even faster than revenue.
August 9, 2006
Despite some recent fears of an economy on the downturn and a company grappling with industry consolidation, Cisco Systems put up strong numbers and issued bullish guidance during its quarterly report yesterday. It bested analyst estimates and posted record revenue, net income, and earnings per share.
Cisco CEO John Chambers boasted on its earnings call that Cisco is gaining market share against almost all of its competitors and total orders are growing even faster than revenue. He also said Cisco's increasingly getting a bigger share of customers' IT budgets and is seeing more requests to meet with his customers' top executives. Cisco's sales last quarter were up 21.3% to $8.0 billion overall, and up 12.5% to $7.4 billion when recent purchase television set-top box vendor Scientific Atlanta is left out of the equation. Net income increased 15.1% to $1.9 billion. Chambers forecast revenue growth between 15% and 20% during the next 12 months, also beating analyst expectations of a 15% rise. Storage area networking revenue was especially hot, up 65%. Cisco's strong results in that arena sit alongside news this week that competitors Brocade Communications Systems and McData Corporation are merging in part to fight Cisco off. Overall, advanced technologies, those beyond Cisco's core routing and switching markets, led the way and increased 23% without Scientific Atlanta. Unified communications products also saw a huge gain, of 50%. Chambers attributed the soaring advanced technologies to strong technology and an architectural approach at designing networks for big businesses. However, according to Chambers, Cisco's enterprise business continued to grow in the low double digits; he said the rate of growth there has slowed. Chambers called those numbers "solid," especially considering that competitors like Nortel Networks and Extreme Networks have had trouble with enterprise growth in the last quarter.
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