Cisco reported net sales for its first quart of fiscal 2009 (ended October 25, 2008) of $10.3 billion, net income (GAAP) of $2.2 billion or $0.37 per share, and non-GAAP net income of $2.5 billion or $0.42 per share. The earnings were slightly ahead of market expectations and reflected a year-over-year growth rate of 8%.
However, Cisco CEO John Chambers warned that the weak global economy is having an impact and that Q2 revenues could fall by up to 10%. Already in October, orders were down by 9%. On the bright side, network traffic volumes continue to rise at a rapid clip.
"Cisco delivered solid revenue and earnings growth in what is clearly a very challenging global economy," said John Chambers, chairman and CEO, Cisco. "Our strategy and focus for managing the business through this market transition is clear - we will manage and prioritize our resources, invest in innovation, and build even stronger relationships with our customers to help enable their success." Chambers continued.
Some highlights for the quarter:
- Switching revenue was $3.6 billion, an increase of 8% year-over-year driven by growth in both our modular and fixed switching portfolio.
- Routing revenue was $1.9 billion, up 1% year-over-year.
- Advanced Technologies revenue totaled $2.7 billion, representing an increase of 17% year-over-year.
- Other product revenue totaled $442 million, a decrease of 13% year-over-year, related to our optical and cable business this quarter.
- Total service revenue was $1.7 billion, up 10% year-over-year with solid growth in Emerging Markets. We are pleased with our growth in advanced services of approximately 15%.
- GAAP net income for the first quarter was $2.2 billion, flat compared to $2.2 billion in the first quarter of fiscal year 2008.
- GAAP earnings per share on a fully diluted basis for the first quarter were $0.37, up from $0.35 in the same quarter of fiscal year 2008.
- Non-GAAP net income for the first quarter of fiscal 2009 was $2.5 billion, flat year-over-year. As a reminder in the first quarter of fiscal year 2008 we recorded a one-time tax benefit of $162M.
- Non-GAAP earnings per share on a fully diluted basis for the first quarter were $0.42, up from $0.40 in the first quarter of fiscal year 2008, a 5% increase year-over-year and our highest earnings per share to date. The one-time tax benefit in the first quarter fiscal year 2008 was approximately $0.03 per share.
- Total gross margin by geography ranged from 63.4% for Emerging Markets to 69.0% in Japan this quarter. Across the geographies the margins have remained relatively stable over the last few quarters.
- Interest and other income was $123 million for the first quarter, including the recognition of realized gains, losses and impairments.
