Cisco Systems emerged from the effects of global economic slowdown in its third fiscal quarter ended May 1 it announced President and CEO, John Chambers, said he probably was the company’s best quarter ever.
Revenue rose 27 percent from a year earlier to U.S. $ 10,400,000,000 while net income increased 61 percent to $ 2,200,000,000, or $ 0.37 per share, based on generally accepted accounting principles. Excluding certain charges, Cisco earned $ 0.42 per share, well above the consensus of analysts expected $ 0.39 per share, according to a poll by Thomson Reuters. Analysts had forecast revenue of $ 10,240,000,000.
In a statement, Chambers said Cisco had registered a record revenue and earnings per share and returned to a balanced growth trend throughout the world had not seen since before the recession. He also said that Cisco is gaining market share and commanding a greater share of customer spending.
“The financial results were outstanding,” Chambers said on a conference call with analysts after the report.
The strong growth spread almost all over the world, “said Chambers. Of the 15 largest country markets for Cisco, all but one showed an increase in orders and 12 were registered order growth of more than 20 percent, he said. All lines of the main company product also advanced, with revenues of switching up to 40 percent, 23 percent of routing and advanced technologies – such as storage networking, wireless, and security – a 18 percent the previous year.
Orders for consumer goods increased more rapidly, more than 50 percent worldwide, but the other categories also increased, including service providers by 30 percent and companies at 26 percent, the company said .
Cisco is convinced that this trend will continue, forecasting year on year revenue growth between 25 percent and 28 percent in the current quarter. “Technology spending is clearly in the fire,” said Chambers at a time during the call.
The company also plans to continue hiring more employees, mostly in sales and in groups to fight the last markets in which Cisco is competing, he said. During the third quarter, the company hired 1,000 people as part of an increase of between 2,000 and 3,000 planned for the coming quarters. The company also received nearly 1,700 employees through the acquisition of Tandberg, a company video Norwegian company completed the acquisition last month.
The economy bottomed out early last year, during the third quarter of Cisco’s fiscal 2009 and turned the next quarter, Chambers said. “Our initial optimism about the economic crisis … proved to be very accurate,” he said.
Even his concern about the debt crisis in Europe that have emerged in recent weeks have not dampened the growth prospects there, Chambers said. But he cautioned that economic conditions and markets could “jump” over the next year or so.