Cisco reported Q2 revenue of $11.2 billion, net income (GAAP) of $1.4 billion or $0.27 per share, and non-GAAP net income of $2.5 billion or $0.47 per share. Q2 sales were down 8% compared to the same period a year earlier, and net income declined 54.5% in part due to a pre-tax charge of $655 million related to the expected cost of remediation of issues with memory components in certain products sold in prior fiscal years.
"We delivered the results we expected this quarter. I'm pleased with the progress we've made managing through the technology transitions of cloud, mobile, security and video," stated chairman and CEO John Chambers. "Our financials are strong and our strategy is solid. The major market transitions are networking centric and as the Internet of Everything becomes more important to business, cities and countries, Cisco is uniquely positioned to help our customers solve their biggest business problems."
Some highlights from the report:
- Cisco announced a quarterly dividend of $0.19 per common share, a two-cent increase over the previous quarter's dividend.
- Gross margin came in at 61.3% compared to 62.3% a year earlier.
- Geographically, sales were down 5% YoY in the Americas, down 2% in EMEA, and down 5% in APJC.
- By customer segment, Enterprise were down 2%, while Service Provider sales fell 12% compared to a year earlier.
- In its last quarterly conference call on 13-Nov-2013, Cisco warned that revenue would decline 8-10% this quarter (Q2) due to lower demand in certain countries, such as China, due to fallout from the NSA scandal. Service Provider orders backlog was said to be significantly weaker than expected.