Cisco revenues and earnings tank in second quarter

Stan Beer
Thursday, 05 February 2009 16:53

IT Industry - Market

As the global recession bites deeper, the recently ended second fiscal quarter for Cisco brought home some harsh realities for the networking giant, with both revenues and earnings suffering sharp falls.

For the quarter ended January 24, 2009 Cisco posted net sales of US$9.1 billion, a year on year drop of 7.5% and net income of US$1.5 billion a drop of 27% compared to the previous corresponding period.

While Cisco tried to put a pretty face on the figures, senior executives tried to remain upbeat in their assessment of the company's performance. However, the words "challenge" and "challenging" made their appearance in statements more than once.

"Cisco showcased solid financial strength during a period of significant economic challenge," said John Chambers, chairman and chief executive officer, Cisco.

"We remain comfortable with our long-term vision and strategy as we move into new market adjacencies and prioritize our existing opportunities. We intend to accelerate the alignment of our resources to prioritize future growth opportunities, gradually decrease our operating expenses, while building even stronger customer relationships to position Cisco for ongoing, long-term market leadership."

"Despite a clearly challenging macro-economic environment, Cisco generated $3.2 billion in cash flows from operations in our second quarter, resulting in total cash and investments of $29.5 billion," said Frank Calderoni, chief financial officer, Cisco.

"I believe our business model and financial position provide us with two key capabilities: speed and flexibility. We believe we have been able to minimize risk to our business, while still positioning Cisco to take advantage of new opportunities."

GAAP Results
	Q2 2009	Q2 2008	Vs. Q2 2008
Net Sales	$9.1 billion	$9.8 billion	-7.5%
Net Income	$1.5 billion	$2.1 billion	-27.0%
Earnings per Share	$0.26	$0.33	-21.2%