Feeds

Battered Cisco weathers another stormy quarter

No turnaround in sight for weak sales in emerging markets

Business security measures using SSL

Cisco CEO John Chambers said he was "pleased" with the company's performance for the third quarter of its fiscal 2014 – and it beat analysts' expectations yet again – but the networking titan's actual earnings were not much better than last quarter's gloomy results.

Revenues for the three months ending on April 26 were $11.55bn, which was an improvement over the previous sequential quarter but a 5.5 per cent drop from a year ago. The 36 prognosticators polled by Yahoo! Finance expected revenues of $11.38bn, on average, although some were hoping the company would crack $12bn.

Cisco's net income, on the other hand, was down 12 per cent year-on-year, to $2.18bn. Excluding certain items, that led to earnings of $0.51 per diluted share, which was flat from the previous year's quarter. Again, however, that beat the $0.48 per share that the analysts were hoping to see.

"Our financial results exceeded the guidance we provided last quarter as we demonstrated clear progress on returning to growth," Chambers said in a canned statement.

And some areas of Cisco's business did indeed grow. Total orders from the US and the UK were both up 7 per cent from the previous year's quarter, and orders from Northern Europe were up 4 per cent.

Among the bright spots, orders of high-end routers grew in the quarter for once, although the company admits that the figures are "still lumpy" – meaning no one knows for sure what the next quarter will bring.

But numbers don't lie, and Cisco's earnings this quarter yet again displayed the networking kingpin's weakness in less-developed economies, where customers are passing on Cisco's pricey kit in favor of more affordable products from the likes of China's Huawei and ZTE.

Sales to emerging markets were down 7 per cent compared to Q3 of 2013, while sales to the "BRIC+M" sector – meaning Brazil, Russia, India, China, and Mexico – were down 13 per cent. Both figures are worse than the declines Chambers & Co saw in the previous sequential quarter.

Those numbers continue to bode poorly for Cisco, which like many technology companies had been eyeing developing markets as the key to continued growth as sales cool off in more mature ones. The truth is that the networker's net income for the first nine months of fiscal 2014 is down 27.3 per cent, as compared to 2013.

But investors mainly seemed pleased that the company once again beat its own guidance, and that of the Wall Street wizards. While Cisco's share price sagged slightly during the day, it climbed 7 per cent in after-hours trading. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.