Cisco Q2 beats estimates

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Cisco Q2 beats estimates

By Jim Duffy

Network World Fusion, 02/03/04

Cisco this week beat analyst expectations with its second quarter result for fiscal 2004.

For the period ended Jan. 24, Cisco posted earnings of $1.3 billion, or $.18 per share, on revenue of $5.4 billion. Analysts were expecting earnings of $.17 per share on revenue of $5.28 billion, according to Thomson Financial Network.

Net income, including the effect of an accounting change, was $724 million, or $0.10 per share for the quarter.

Revenue was up 14.5% from the same period a year ago and 5.8% from the first quarter. Earnings were up 31% from 2003’s second quarter and 18% from the first quarter of fiscal 2004.

Sales for the first six months of fiscal 2004 were $10.5 billion, compared with $9.6 billion for the first six months of fiscal 2003, an increase of 9.8%. Net income for the first six months of fiscal 2004 was $2.4 billion, or $0.33 per share, compared with $1.6 billion, or $0.22 per share for the first six months of fiscal 2003.

Cisco President and CEO John Chambers attributed the quarter’s results to an improving global economy and customer confidence and investments. He stated that Cisco realized “positive momentum” in storage, security, wireless and IP telephony sales this quarter, as well as in the consumer market.

“It’s nice to see the second sequential revenue growth quarter, which we have not seen in a long time,” Chambers says.

Product revenue during the quarter was $4.5 billion. Sales of switches accounted for 39% of it, followed by routers at 26%; services at 16%; advanced technologies, including IP telephony, home networking, optical, security, storage and wireless, at 15%; and other, which includes access and network management products, at 4%.

Cisco’s service provider business increased “in the high teens” from the second quarter of fiscal 2003, Chambers says. Product highlights include the 10000 series router, which experienced a 100% sequential increase in bookings and revenue, he says.

Guidance for the third quarter is sequential revenue growth of 1% to 3%, a year-over-year increase of 18% to 20%.