Cisco posted fiscal 2005 first quarter results in line with analyst predictions.
For the period ended Oct. 30, net sales were $6.0 billion, compared with $5.1 billion for the first quarter of fiscal 2004, an increase of 17.1%. Sales were up 0.8% sequentially from the fourth quarter of fiscal 2004.
Net income for the first quarter of fiscal 2005, on a generally accepted accounting principles (GAAP) basis, was $1.4 billion or 21 cents per share, compared with $1.1 billion or 15 cents per share for the first quarter of fiscal 2004. GAAP earnings were a penny per share better than fiscal 2004’s fourth quarter.
Pro forma net income for the first quarter of fiscal 2005 was $1.5 billion or 21 cents per share, compared with $1.2 billion or 17 cents per share for the first quarter of fiscal 2004. Pro forma earnings were flat sequentially.
During the first quarter of fiscal 2005, Cisco completed the acquisition of Actona Technologies for a purchase price of $90 million; dynamicsoft for $69 million; Parc Technologies for $14 million; P-Cube for $213 million; and certain assets of Procket Networks for $92 million.
Cisco also announced that on Nov. 8, its board of directors authorized up to $10 billion in additional repurchases of its common stock. Cisco’s board had previously authorized up to $25 billion in stock repurchases.
Product sales accounted for $5 billion of Cisco’s quarterly revenue while services accounted for $938 million. Switches accounted for 43% of revenue, routers 21%, advanced technologies — IP telephony, security, storage, wireless, optical and home networking — 16%, services 16% and other — access and networking management software — 4%.
Revenue in home networking grew 60% year-over-year, while IP telephony grew 15%. Wireless grew 50%, storage 160%, optical 13% and security 20% from the first quarter of fiscal 2004.
Bookings in Cisco’s commercial, enterprise and service provider businesses grew between 10% and 18% from the first quarter of fiscal 2004.
Cisco says its routing business has been “lumpy” due to service-provider implementation cycles, increased competition from Asian companies and new product transitions. Cisco announced its core router, the CRS-1, in May and new access routers in September.
Sources say Cisco is also funding development of next-generation service-provider edge routers to succeed its 7600 and 10000 series systems. Cisco CEO John Chambers says he is “comfortable” with Cisco’s 7600 and 10000 series “evolution plans.”
Cisco is funding router start-up BCN Systems of Santa Clara, Calif., which some believe is developing the next-generation 7600 and 10000 series routers. Cisco confirmed it has a stake in the company but would not comment on BCN’s product development.
Cisco expects its second quarter revenue to be up 1% to 3% from the first quarter of fiscal 2005, and 12% to 14% from the second quarter of fiscal 2004.
