Cisco’s second quarter earnings beat analyst expectations on revenue in line with those forecast.
For the period ended Jan. 28, 2006, Cisco’s net sales were $6.6 billion, compared with $6.1 billion for the second quarter of fiscal 2005, an increase of 9.3%, and $6.5 billion for the first quarter of fiscal 2006, an increase of 1.2%.
Non-GAAP (pro forma) net income for the second quarter of fiscal 2006 was $1.6 billion, or 26 cents per share, compared with $1.5 billion or 22 cents per share for the second quarter of fiscal 2005, and $1.6 billion or 25 cents per share for the first quarter of fiscal 2006. Analysts were expecting pro forma earnings per share of 25 cents for the quarter.
Net sales for the first six months of fiscal 2006 were $13.2 billion, compared with $12.0 billion for the first six months of fiscal 2005, an increase of 9.5%. Non-GAAP net income for the first six months of fiscal 2006 was $3.2 billion or 51 cents per share, compared with $2.9 billion or 44 cents per share for the first six months of fiscal 2005.
“We’re pleased with the solid revenue and earnings per share results Cisco delivered during its second quarter, but also especially pleased with our strong order momentum,” said John Chambers, Cisco president and CEO, in a statement. “This proves our strategy is working in terms of the convergence of voice, video and data along with our balanced approach to our customer segments, core and advanced technologies, business and technology architecture and key geographic theaters.”
Orders grew in the mid-teens year over year. In the U.S., orders grew 20% over last year, Cisco said.
Cisco’s Enterprise business grew in the high teens year over year.
Product revenue in the quarter was $5.5 billion, while services accounted fro $1.1 billion. Sales of routers were $1.42 billion, up 7% from last year’s second quarter. Switches accounted for $2.17 billion in sales, and increase of 12% over last year.
Advanced Technology revenue for the quarter was $1.28 billion, an increase of 5%. Products in the “other” category — which include access routers — accounted for $175 million in sales, a decrease of 1% from the second quarter of 2005.
Sales of optical products, always challenging for Cisco, declined 34% from last year. Cisco said it would “reclassify” optical products into the routing and switching categories as it integrates more optical functionality into those platforms and gradually de-emphasizes TDM-based products.
Cisco guided to year-over-year revenue growth of 10% to 12% in the third quarter, and order growth of 10% to 15%.
