Cisco Quarter Pleases Investors, Analysts

By Jessica Davis  |  Print this article Print

Cisco reported higher year-over-year net sales but saw net income decline as restructuring charges eroded profits.

Cisco (NASDAQ:CSCO) surprised the industry with higher than expected revenues for its fourth quarter. Net sales hit $11.2 billion for Q4, representing a 3.3 percent increase, and $43.2 for the full year.

But net income fell to $1.2 billion compared to $1.9 billion in the same period a year ago as $772 million in restructuring and $923 million in other charges hit the bottom line.  The restructuring included job cuts of 6,500 as part of Cisco‚Äôs effort to return to its core businesses after Chairman and CEO John Chambers acknowledged that Cisco had lost its focus. Now the company is returning to the right track, he said.

"We've made significant progress on our comprehensive action plan to position ourselves for our next stage of growth and profitability, while delivering solid financial results in Q4," said Chambers, in a statement. "As we start our next fiscal year, you will see a very focused, agile, lean and aggressive company that is laser focused on helping our customers use intelligent networks to transform their businesses."

For the full fiscal year Cisco reported net income of $6.49 billion compared to $7.77 billion for the previous year.

Shares of Cisco rose by close to 20 percent in Thursday morning trading.
Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com