Cisco profits in the fiscal fourth quarter fell by about a third more than last year, while sales rose only 3.3 percent, the company said Wednesday.
Net income for the fourth quarter ended July 30 was U.S. $ 1.2 billion, down 36.3 percent from 1.9 billion a year earlier. Earnings per share declined 33.3 percent to 22 cents a share from 33 cents for the last year for the fourth quarter.
The results are in the midst of a major restructuring at Cisco, aimed at refocusing the company on his heart in the art, such as routing and switching.
“We have made significant progress on our overall plan of action to us for our next growth phase and position of profitability, and provides strong financial results in the fourth quarter,” Chairman and CEO John Chambers said in a press release reporting financial results.
Cisco’s revenue rose to $ 11200000000 $ 10800000000 in the quarter. This figure beat the consensus estimate of analysts polled by Thomson Reuters. They planned $ 10980000000.
Profit excluding certain non-recurring items was $ 0.40 per share, slightly above analysts’ forecasts.
Chambers promised to accelerate the restructuring of Cisco, which was conducted in 6500 job cuts announced the abolition of the division of the company Flip Video and other adjustments. The process will continue at an even faster pace and will take years, not quarters, he said.
“It would be very easy on the changes we have made peace. … This is clearly not what we do,” Chambers said during a conference call to discuss financial results. He said Cisco is always a “aggressive, focused and simplified” the company. Cisco is ahead of plan, $ 1000000000 of its annual expenditure for the year 2012, said Chambers.
In response to questions from analysts, Chambers said, Cisco remains committed to its business television set-top box, if it is moved from left to the “connected home” that its business unit of Linksys home networking. The WebEx online conferencing service is part of a broader collaboration architecture, which is also a business networking Quad social platform, MediaNet and infrastructure will be sold. “We have too long outside,” said Chambers.
Cisco has already taken several steps to restructure, according to Gary Moore, the company recently appointed Chief Operating Officer. It has significantly reduced the number of committees and councils in key areas, instead of appointing leaders to account, and regional sales teams more autonomy, he said. The company employs approximately 23,000 people in a company with a workforce of just over 70 000 realigned. The overriding goal is to adapt more quickly to customer needs, Moore said.
In the long run, changes are right now to help Cisco to become more competitive with rivals, and not by the same process, the Chambers.
“Although I know we did not have to go through this, it was clearly time for a fundamental change to Cisco,” he said.
The company expects sales growth compared to about the same as in the previous period, even with a growth of between 1 and 4 percent.
Public spending, a weak point in the fourth quarter will slow down worldwide in the coming quarters, as governments to make cuts, Chambers believes. In the U.S., orders were from the federal budget by 18 percent over the previous year, while state and local orders fell by 2 percent. Two areas in which public authorities are continuing to invest cloud infrastructure and video, he said.
Despite the gloomy financial news of recent weeks, Chambers sounded an optimistic note. Sales and orders in the best emerging markets like Brazil, Russia, India, China and Mexico increased by 25 percent in the first quarter, he said. Cisco had its biggest quarter ever in sales and service provider, growing at a service provider contracts by 19 percent overall, and carrier infrastructure products such as the central hub routing and CRS ASR9000 switches 1000 and strong growth.
Meanwhile, Chambers said he thinks the worst is over for the decline in market share will grow in the Cisco and the capital of the company by industry routing.
In after-hours trading Wednesday, shares of Cisco (NASDAQ: CSCO) were $ 0.95 to $ 14.68.