Cisco Systems Monday says its first quarter may have been lacking in sales, but it made up for it by posting 4 cents a share.
The consensus of analysts surveyed by Thomson Financial/First Call expected Cisco to earn only 2 cents a share.
However, it’s nothing to what the San Jose, Calif.-based computer-networking equipment maker earned this same time last year. This time Cisco said its earnings came to $332 million – or 4 cents per share compared to $1.4 billion or 18 cents per share. Cisco sales for the quarter fell 32 percent to $4.4 billion from $6.52 billion last year. However, that’s better than the previous quarter’s $4.3 billion.
But, no matter how you slice it, CEO John Chambers says he is pleased.
“Given the very challenging economic and capital spending environment, we were pleased to deliver a solid quarter with good order linearity, sequential revenue growth and profitable market share gains,” says Chambers. “We were especially pleased with the size of the market share gains when compared to our industry peers who on average reported sequential revenue decreases in the high teens.”
Chambers says Cisco sales for the quarter ending Oct. 31 fell 32 percent to $4.4 billion from $6.52 billion last year. However, they rose from the previous quarter’s $4.3 billion.
Granted the company has had a great deal of activity to get it to this point.
In the last three months Cisco finished its $181 million acquisition of Allegro Systems and its $150 million bid for AuroraNetics. Cisco says it also took a one-time charge of $37 million as a write-off of in-process R&D.
Probably Cisco’s largest change in the quarter was a reorganization from its current three lines of businesses – enterprise, service provider and commercial to form 11 separate and distinct groups.
This is the first time this year that Cisco either met or exceeded analysts’ expectations for the quarter.
In February, Cisco missed earnings forecasts by a penny, and warned at the time that quarterly sales would be flat for the rest of the fiscal year. It was the first time that the company had failed to meet or exceeded Wall Street estimates for as long as anyone could remember. Then it happened again in May.
But because of the aggressive changes that Chambers and Co. have made in the last six months, some analysts are saying the company is showing signs of a turnaround.
