Wednesday, August 17, 2016

Cisco Posts Sales of $12.6 Billion, Confirms 5,500 Job Cuts

Cisco reported fourth quarter revenue of $12.6 billion, net income (GAAP) of $2.8 billion or $0.56 per share, and non-GAAP net income of $3.2 billion or $0.63 per share.

"We had another strong quarter, wrapping up a great year. I am particularly pleased with our performance in priority areas including security, data center switching, collaboration, services as well as our overall performance, with revenues up 2% in Q4 excluding the SP Video CPE business," said Chuck Robbins, CEO of Cisco. "We continue to execute well in a challenging macro environment. Despite slowing in our Service Provider business and Emerging Markets after three consecutive quarters of growth, the balance of the business was healthy with 5% order growth. This growth and balance demonstrates the strength of our diverse portfolio. Our product deferred revenue from software and subscriptions grew 33% showing the continued momentum of our business model transformation."

Cisco also confirmed a corporate restructuring that will eliminate 5,500 jobs, representing approximately 7% of its global workforce. Currently, Cisco has about 73,711 employees, up from 71,833 a year ago. The company said it intends to invest aggressively in growth areas such as security, IoT, next-gen data center and cloud, while lowering its cost base in slower areas of its portfolio.

Some highlights for the quarter:

  • Total Q4 2016 revenue was $12.6 billion, up 2%, with product revenue up 1% and service revenue up 5%. 
  • Revenue by geographic segment was: Americas up 3%, EMEA up 3%, and APJC down 2%. Product revenue growth was led by Security at 16%. 
  • Collaboration, Wireless and Switching product revenue increased by 6%, 5%, and 2%, respectively. 
  • Service Provider Video, NGN Routing and Data Center product revenue decreased by 12%, 6%, and 1%, respectively.
  • Cisco had $65.8 billion in cash and cash equivalents at the end of the fourth quarter of fiscal 2016, compared with $63.5 billion at the end of the third quarter of fiscal 2016, and compared with $60.4 billion at the end of fiscal 2015. The company said total cash and cash equivalents and investments available in the United States at the end of Q4 was $5.9 billion.

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