Wednesday, August 14, 2013

Cisco Posts Strong Quarter but Trims Forecast on Uneven Global Economics

Cisco reported $12.4 billion, net income (GAAP) basis of $2.3 billion or $0.42 per share, and non-GAAP net income of $2.8 billion or $0.52 per share for its fourth fiscal quarter, ended July 27, 2013.  Q4 revenue was up 6% year-over-year.  

"My confidence in our ability to be the #1 IT Company is increasing. Our fourth quarter was a record on many fronts, with record revenue, and record non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share. In every case, we exceeded the midpoint of our guidance. We also generated $4 billion in operating cash flow in the quarter, another record," stated Cisco Chairman and CEO John Chambers.

"Our financial strategy is working as our profits grew faster than revenue for the full fiscal year," stated Frank Calderoni, executive vice president and chief financial officer. "Our fourth quarter also delivered solid financial results as we continued to deliver profitable growth to maximize shareholder value for the long-term."

However, Cisco trimmed its guidance saying the economic recovery was uneven, with some regions, notably Europe, performing worse than others. The company now expects growth of 3-5% for the current quarter, compared with the 6% rate just reported. Cisco said it remains committed to its long-term financial model, including driving profitable revenue growth of 5-7%.

Cisco plans to cut about 4,000 jobs or about 5% of its workforce as a result.