Cisco reported net sales of $10.4 billion for its second quarter, ended 29-Jan-2011, net income on a generally accepted accounting principles (GAAP) basis of $1.5 billion or $0.27 per share, and non-GAAP net income of $2.1 billion or $0.37 per share. Revenue was up 6% compared to a year earlier, however net income fell nearly 18% compared to a year ago. Earnings per share came in at $0.27, down 16% from a year earlier, but ahead of market expectations. In its previous fiscal quarter, Cisco reported net sales of $10.75 billion, up 19% compared to a year earlier.
Cisco said it is in a period of architectural transition. Sales of switching equipment was down 7% compared to a year earlier. The company said it saw some softness in public sector spending, but was pleased overall with its momentum in major categories.
"The quarter played out as we expected. Our strategy of tightly integrating our multiple products through an architectural approach is working, and we are delivering innovation in each major product family," said John Chambers, chairman and CEO, Cisco. "As a company, we are going through a period of transition as we move aggressively in the market with our architectural strategy. We have managed these market transitions many times, positioning Cisco and our customers for success. Simply put, we are owning our evolution and the next generation of industry leadership."
Some highlights for the quarter:
- Compared to a year earlier, enterprise sales were up 10%, public sector sales were up 7%, Service Provider sales were up 9%, commercial sales were up 11% and consumer sales were down 15%.
- Revenue growth in New Products category up 15% y/y, Data Center up 59%, Collaboration up 37% and Wireless up 34% y/y.
- Cash flows from operations were $2.6 billion for the second quarter of fiscal 2011, compared with $2.5 billion for the second quarter of fiscal 2010, and compared with $1.7 billion for the first quarter of fiscal 2011.
- Cash and cash equivalents and investments were $40.2 billion at the end of the second quarter of fiscal 2011, compared with $39.9 billion at the end of fiscal 2010, and compared with $38.9 billion at the end of the first quarter of fiscal 2011.
- During the second quarter of fiscal 2011, Cisco repurchased 89 million shares of common stock under the stock repurchase program at an average price of $20.15 per share for an aggregate purchase price of $1.8 billion.
- Headcount at the end of the period was 72,935 compared to 65,874 a year earlier.
