Cisco Sales Grow in 2011 as Business is Simplified
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Fiscal 2011 was a challenging year for networking giant Cisco (NASDAQ:CSCO). The company closed business units and laid off employees. Even in the midst of those challenges, Cisco continues to push forward and realign its business for future growth.
Cisco reported its fourth quarter fiscal 2011 financial earnings late Wednesday. For the quarter, Net Sales were reported at $11.2 billion for a 3 percent year-over-year increase. Net Income was reported at $1.2 billion, which is a 36.3 percent decline over the fourth quarter of fiscal 2010. For the full fiscal 2011 year, Cisco's Net Sales came in at 43.2 billion for a 7.9 percent year-over-year gain. Net Income for the year was reported at $6.5 billion for a 16.4 percent year-over-year decline.
Cisco was affected by weakness in multiple areas of its business including public sector spending. Cisco CEO John Chambers said that Public sector order growth on a global basis decreased 4 percent in Q4. The downturn was even more pronounced in the U.S. where overall public sector order growth decreased by 7 percent.
"This should no longer be a surprise as we are now seeing similar concerns around the public sector customer segments for many of our technology peers," Chambers said during Cisco's earnings call. "As we said before, we anticipate global public sector spending to continue to be in a challenge for the next several quarters."
Cisco's bread and butter business in routing and switching also was in decline during the fourth quarter. Cisco's routing revenue was down 2 percent year-over-year while switching revenue was down by 4 percent year-over-year.