Cisco reported net sales of $11.9 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.1 billion or $0.39 per share, and non-GAAP net income of $2.6 billion or $0.48 per share, for its first fiscal quarter ended October 27, 2012.
"We delivered record results this quarter -- with revenue growth of 6 percent and strong earnings per share growth -- demonstrating our vision and strategy are working," said John Chambers, chairman and chief executive officer, Cisco. "Our innovation engine, operational discipline and on-going evolution are enabling us to differentiate in the market. Cisco is at the center of the major market transitions -- cloud, mobility, video -- and yet we believe the largest market transition lies ahead of us, as the Internet of Everything becomes a reality."
Some highlights:
- Revenue growth of 6% occurred in very challenging market conditions. The service business continues to grow at double digit rates. Sales to US enterprises grew 95, sales to U.S. service providers grew 13%, while sales to U.S. commercial sector was down 5%.
- Cisco is making progress in becoming a major IT player and not just network equipment supplier
- The government market is expected to remain challenging going forward. The telepresence business was down in the mid teens.
- Cisco believes it is well positioned for next gen data centers thanks to its ability to unify the physical and the virtual.
- In Q1, product orders were flat YoY. Geographically: Americas +2%, Latin America +3%, led by Brazil at 24% and Mexico at 11%, Canada was down 12%; APAC was up 7%, India was up 50%, Japan grew in the mid single digits, and China was flat; EMEA declined 10%.
- Europe may get worse before it gets better. There are signs of improvement in the U.S. market. APAC likely to remain fastest growing area.
- Cash flows from operations were $2.5 billion for the first quarter of fiscal 2013, compared with $2.3 billion for the first quarter of fiscal 2012, and compared with $3.1 billion for the fourth quarter of fiscal 2012.
- Cash and cash equivalents and investments were $45.0 billion at the end of the first quarter of fiscal 2013, compared with $48.7 billion at the end of the fourth quarter of fiscal 2012.
