Monday, February 7, 2005

Cisco Sales up 12%, Net Income Doubles

Cisco Systems reported net sales for the second quarter of fiscal 2005 were $6.1 billion, compared with $5.4 billion for the second quarter of fiscal 2004, an increase of 12.3 percent, and compared with $6.0 billion for the first quarter of fiscal 2005, an increase of 1.5 percent.

Net income for the second quarter of fiscal 2005, on a generally accepted accounting principles (GAAP) basis, was $1.4 billion or $0.21 per share, compared with $724 million or $0.10 per share for the second quarter of fiscal 2004, and compared with $1.4 billion or $0.21 per share for the first quarter of fiscal 2005.

"This quarter's solid results, highlighted by record net income and continued order growth across our routing, switching, and advanced technologies, indicate continued product leadership and solid market momentum," said John Chambers, president and CEO, Cisco Systems.

Some highlights of the quarter include:

  • the period was Cisco's 11th consecutive quarter of pro forma profit, as a percentage of revenue, above 20%

  • Product margin gross was 67%

  • Cash flow from operations was $1.8 billion

  • Cisco currently holds about $17 billion in cash and investments

  • there was a 40% year over year (yoy) growth in advanced technologies

  • Revenue breakdown by product category was

    Routers 22%

    Switches 40%

    Advanced Technologies 19%

    Other 3%

    Services 16%

  • Linksys shipped over 470,000 VoIP phone adapter ports during its first full quarter of availability

  • Storage revenue was up 70% yoy and up 40% sequentially

  • Both networked home and IP telephony had revenues of about $220 million, up 40% yoy

  • Wireless revenue was up over 30% yoy

  • Optical revenue was up 30% yoy

  • Security revenue was up over 30% yoy

  • Cisco currently has 12 customers and 12 trials for its CRS platform

  • Areas of concern highlighted by the company include the continued swings in global economic activity and capital spending, as well as the expanding wave of low-cost competitors. The company believes its architectures plus its expanding value-added services strategy will differentiate it in the marketplace.

  • For the next quarter, Cisco expects revenue to be up 8 - 10% yoy and flat to up 2% sequentially.


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