Cisco sees slower growth in second quarter
November 14, 2012 10:21 AM EST
Cisco Systems Inc reported first quarter results that beat estimates but expects flat earnings and slower revenue growth for the current quarter.
"We are modeling Europe to get worse before it gets better," Chief Executive John Chambers said on Tuesday, echoing his comments from the company's fourth-quarter earnings call in August.
However, he added that "we see signs of improvement in the U.S. in enterprise, service provider and commercial."
Still, Chamber said, it was too early to speak of a trend "though we are continuing to see what we like."
Cisco said it expects earnings per share, excluding items, of 47 cents to 48 cents in its fiscal second quarter, which runs until the end of January. A year earlier it reported EPS of 47 cents.
It also said it sees revenue growth in a range of 3.5 percent to 5.5 percent, compared with 11.6 percent growth in the second quarter of 2012.
Chambers said he would give a long-term outlook at the company's financial analyst day next month.
In its first quarter, which ran until the end of October, Cisco surprised analysts with a solid beat, due to cost cuts and the company's broad product range.
First-quarter net income, excluding items, rose 10.6 percent to $2.6 billion, or 48 cents per share, compared with analysts' average estimate of 46 cents a share as compiled by Thomson Reuters I/B/E/S.
Revenue rose 6 percent from the year-ago quarter to $11.9 billion, compared with a Street view of $11.77 billion.
Cisco's shares rose 6.7 percent to $17.98 in after-hours trading.
Analysts applauded the company's cost discipline and welcomed solid results in a tough environment.
"Given concern about enterprise spending, the company seems to be bucking the trends," said Bill Kreher, senior technology analyst at Edward Jones.
"The bar was low but the company did exceed those expectations. The company appears to be using strong cost discipline in meeting their numbers."
Mizuho Securities analyst Joanna Makris said "at first blush these are good numbers in a bad macro (environment)."
"It's largely due to a product mix - a larger shift to routing - and cost cutting," adding that "this is better than expected. We have been thinking they would squeak by on the top line."
(Reporting by Nicola Leske; additional reporting by Liana Baker and Jennifer Saba; Editing by Phil Berlowitz)
Most Popular Slideshows
- Real Life ‘Frozen’: Snow Overwhelms The US, Kills 7; More To Come (Pictures)
- Angelina Jolie, Brad Pitt in Sydney for ‘Unbroken’ Red Carpet Premiere [PHOTOS]
- ‘The Walking Dead’ Season 5, Episode 8 Spoilers: Daryl Dixon Is Set To Burn The Place Down in ‘Coda’
- G20 Summit Awkward Moments: Putin Yawns, Mystery Bubbles Appear, F18 Drama Ensues
Join the Conversation
- Walmart Early Price Matching Special Event On Nov. 21, 2014 Matches Its Competitors' Black Friday 2014 Prices And Includes Exclusive Deals For Samsung LED HDTVs And iPad Air 2 [WATCH VIDEO]
- US Plane Flying Over Russian Skies Spotted; Vladimir Putin Ready For 'Practical Cooperation' With US
- Alleged 'Microsoft Lumia 1030' Front Panel Leaked With Capacitive Buttons; 'Xbox One' Owners To Get Free Goodies On Anniversary
- Nexus 6 Release Date And Price Under AT&T, T-Mobile And Sprint Listed
- Walmart Pre-Black Friday 2014 Sale On Nov. 21, 2014 Includes Discounts On The 'NBA 2K15' For PS4 And The 'Skylanders Trap Team’ Starter Kit [WATCH VIDEO]
- Black Friday 2014 Sale: Top Deals On Game Consoles Xbox One, PS4, Nintendo Wii U And More
- Cold War 2: Russia, China And North Korea’s Blacklisted Company Fortify Alliance -- Reports