Cisco Growing Routing as Rivals Slip
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Cisco Systems (NASDAQ:CSCO) is having a really good start to 2012. The networking giant reported second quarter financial earnings late Wednesday that surpassed their own expectations.
For the second quarter of 2012, Cisco reported revenues of $11.5 billion which is an 11 percent year-over-year increase. The revenue growth exceeded Cisco's own guidance of seven to eight percent given during the first quarter of the year. Net Income was reported at $2.2 billion or $0.40 a share.
Moving forward, Cisco CEO John Chambers provided third quarter fiscal 2012 guidance for revenue growth to be in the range of five to seven percent on a year-over-year basis.
"The bottom line for Cisco is simple: innovation, speed and agility are in. Costs and complexity are out," Chambers said during the company's earnings call.
Cisco has been in the proccess of restructuring its business over the last year. At Cisco's 2011 Financial Analyst meeting Chambers' told the audience that his company was "fat" and needed to realign its priorities.
For Cisco, the first foundational priority is their leadership in core networking, which is all about routing and switching and services. During the second quarter, Cisco's next generation routing portfolio grew revenues by eight percent.
"We appear to again be gaining market share in routing versus many of our competitors," Chambers said. "For example, in the most recent quarter, one of our major routing competitors reported routing product revenue being down over 20 percent year-over-year."