Steady, hungry Cisco closes 2005 with double-digit gains

Ready to buy again

Despite a flurry of acquisitions, Cisco maintained its poise during the fourth quarter and fiscal 2005 to post steady, double-digit gains in both periods.

Cisco's net sales rose 11 per cent during the fourth quarter to hit $6.6bn - up from $5.9bn in the same period last year. Net income moved higher as well at $1.5bn versus $1.4bn during Q4 in 2004.

For the full year, Cisco reported sales of $24.8bn - a 13 per cent rise over the $22.0bn reported in 2004. Net income surged to $5.7bn from $4.4bn.

These financial gains came as Cisco closed buys of FineGround, MI Secure, NetSift, Sipura Technology, Topspin Communications and Vihana during the fourth quarter. Cisco also closed out the year by announcing plans to acquire KiSS Technology and Sheer Networks. All of these buys add to a massive list Cisco compiled during Fiscal 2005.

"I am pleased with the continued focus and execution on our three long-term key financial priorities - growth, profitability and increasing shareholder value," said Dennis Powell, CFO at Cisco. "With steady customer demand for our products across key segments, Cisco is clearly delivering solid performance."

Industry scuttlebutt has Cisco eyeing Nokia as its next prize. We, however, maintain a "Skeptical" rating on this deal while giving the merger of Cisco and Nabisco our "The Wheels are in Motion, Mate" designation.

Cisco exits 2005 with $16.1bn compared to $19.3bn at the end of 2004, reflecting its penchant for acquisition and share buybacks.

In the current quarter, Cisco expects sales to rise 10 per cent year-over-year. Investors sent Cisco shares slightly lower in the after-hours markets to $18.89. ®

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