Cisco’s 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 dropped from 33.3 percent to 22 cents a share from 33 cents last year for the fourth quarter.
The results are in the midst of a major restructuring at Cisco, to refocus the company on his heart craft, such as routing and switching.
“We have made significant progress on our overall plan of action has made us on our next growth phase and position of profitability, and provides strong financial results for the fourth quarter,” Chairman and CEO John Chambers said in a press release reporting financial results.
Cisco’s revenue rose to $ 10800000000 11200000000 in the neighborhood of $. That figure beat the consensus estimate of analysts polled by Thomson Reuters. They had expected $ 10980000000.
Earnings excluding certain non-recurring items was $ 0.40 per share, slightly above analysts’ forecasts.
Chambers is committed to accelerating the restructuring of Cisco, which was conducted in 6500 announced job cuts, the elimination of the division of the company Flip Video and other adjustments. The process will continue at an even faster rate 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,” said Chambers during a conference call to discuss financial results. He said Cisco is always a “aggressive, focused and simplified” the company. Cisco is ahead of the annual cost of his plan for $ 1000000000 for the year 2012, said Chambers.
In response to questions from analysts, said Chambers, Cisco remains committed to its business TV set-top box, although it moves to leave the “connected home” business, which his unit from Linksys home networking. The WebEx online conferencing service is part of a great collaboration architecture, which is also his business quad social networking and platform infrastructure MediaNet sale. “We left 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 boards in key areas, instead of naming the responsible leaders, 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, says Moore.
The long-term changes in Cisco can now help them become more competitive against rivals, 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 revenue growth compared to about the same as in the previous period, even with growth of 1 to 4 percent.
Public spending, a weak point in the fourth quarter, will slow the world will remain in the coming quarters, as governments to make cuts, believes Chambers. United States, orders were up 18 percent of the Federal during the previous year, while state and local orders were down 2 percent. Two areas in which public authorities are continuing to invest cloud infrastructure and video, he said.
Despite the bleak financial news in recent weeks, Chambers sounded an optimistic note. Sales and orders of the major developing markets such as Brazil, Russia, India, China and Mexico increased by an average of 25 percent in the first quarter, he said. Cisco had a good quarter growing in sales to service providers with a comprehensive service contract by 19 percent, and carrier infrastructure products, such as the CRS platform core routing and switching ASR9000 and 1000 growth .
Meanwhile, Chambers said he thinks the worst is over for the decline in market share will grow in Cisco and social capital of the Company by Industry routing.
In after-hours trading Wednesday, shares of Cisco (NASDAQ: CSCO) was up $ 0.95 to $ 14.68.