Ok, we’ll start with the bad news. Cisco’s Q2 earnings were expected to be dismal and they were. The company reported a 27% drop in net income and a 7.5% drop in net sales compared to its year ago Q2 results. Now for the silver lining … its $1.9 billion profit, 32 cents a share (non-GAAP) on $9.1 billion in sales for the quarter exceeded expectations. Analysts had expected the company to report earnings of 30 cents a share on revenue of $9 billion, according to a consensus survey by Thomson Reuters. But when forced to conform to the GAAP’s standardized accounting rules, its net came in at $1.5 billion or 26 cents a share.
Is the glass half full or half empty? Certainly, Cisco’s revenue stream and profit on said stream has been throttled down like every other company in the IT industry — same as other industries. But quarter in and quarter out, the company remains profitable. If you can say one thing for Cisco’s financial leaders it is that they have a masterful ability to manage the company’s books to nearly always meet or exceed Wall Street’s expectations. On top of that, the company is sitting on cash and investments of $29.5 billion, according to Frank Calderoni, chief financial officer, Cisco.
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