Cisco's net income and revenue beat analysts' expectations
- Source: Global Times
- [14:24 November 05 2009]
- Comments
Cisco Systems Inc. announced Wednesday that its net income for the first fiscal quarter of 2010 was $1.8 billion and revenue was $9. billion, beating analysts' estimates due to a cost-cutting campaign. Cisco also said it would expand its stock buyback plan by $10 billion.
According to the company's quarterly report released Nov. 4, the net income was $1.8 billion in the first quarter of the fiscal year 2010, down 12.7 percent compared with $2.2 billion a year ago. Excluding stock compensation and some other costs, earnings were 36 cents per share, down 14.3 percent from previous year’s 42 cents, but beat the 31 cents estimated by analysts in a Bloomberg survey. Revenue, or net sales, fell 12.7 percent to $9 billion in the period ended Oct. 24, against last year’s $10.3 billion, but also exceeding the $8.74 billion forecasted by analysts.
On a conference call held Wednesday, Cisco also predicted a growth in sales in the second quarter from 1 percent to 4 percent compared with a year ago, indicating a rebound in sales in the current period after four straight quarters of declines.
The cost-cutting campaign, was due to good performances on net income and revenue, and the measures company's CEO John Chambers undertook during the recession, included freezing hiring, shuttering offices and cutting travel.
The company has been authorized by the board of directors to buy back its stakes, a total of $62 billion. The remaining authorized amount for stock buyback, including the additional authorization, is approximately $13.1 billion.
To fulfill the pledge of getting more aggressive in mergers and partnerships during the economic revival period, according to Chambers last month, Cisco has announced four acquisitions and a joint venture since Oct 1, including a purchase of cable box business Nov. 3 from China's DVN.
Cisco dominates the market for switches that are used to run corporate networks, and routers that are in digital phone carriers' and Internet-service providers' favor, which, along with its cost-cutting campaign and other growth-fuelling measures, helped pick up investors' confidence.
"Spending on data-networking gear is a tide that will lift all boats," said John Krause, an analyst for Thrivent Financial for Lutherans in Appleton, Wisconsin, which owned 4.4 million Cisco shares as of Sep 30, according to Bloomberg data. "People who had projects on hold are probably resuming the more strategic ones. We're likely to see this improvement continue on into 2010."
