Cisco Posts Gains In Sales And Profits - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure
News
5/10/2005
06:41 PM
50%
50%

Cisco Posts Gains In Sales And Profits

Net sales for the quarter were $6.2 billion, up from $5.6 billion a year earlier, while net income was $1.4 billion, up from $1.2 billion.

Cisco Systems, the world largest maker of networking equipment, reported double-digit gains year over year in sales and profits for its third fiscal quarter of 2005 ended April 30, the company reported Tuesday after the stock market closed.

Net sales for the quarter were $6.2 billion, up from $5.6 billion a year earlier, while net income was $1.4 billion, up from $1.2 billion. The company said solid gains were reported in just about every geographical region, customer category, and product market segment.

Cisco CEO John Chambers said in a teleconference that he was optimistic enough about additional growth to authorize the hiring of more sales staff. In a statement released with the financial report, Chambers said: "Today's results are a clear indication that our integrated technology strategy is working--customers are realizing the benefits of an intelligent network architecture."

The networking market should grow from 10% to 15% in the next quarter, and whether Cisco is at the high end or the low end of that range will depend on how well it executes, he said.

The strongest growth came in sales to telecommunications companies and service providers, where orders for products jumped 20% over the previous quarter and increased 25% from the quarter a year earlier. The growth in the U.S. service provider market was 40%. Cisco in the past few months reported orders from British Telecom, NTT Communications of Japan, Sprint, and others.

Cisco is benefiting from the move by communications service providers to an IP infrastructure so they can more easily offer voice, video, and data services using the same equipment, Chambers said.

"We're starting to see carriers make their decisions for their next-generation IP networks. Cable-TV companies were some of the first, along with international companies, to embrace IP," Cisco chief technology officer Charles Giancarlo says. "Wireless players have started to do that as well. U.S. local exchange companies are some of the more recent converts."

The enterprise IP telephony market also showed strong growth, increasing 15% quarter over quarter and more than 30% from the quarter a year ago. Cisco said it has shipped its 5 millionth IP telephone and that, overall, sales of IP telephony equipment to businesses have hit an annual rate of $1 billion.

"Soon we will be come the largest provider of enterprise telephony equipment," Chambers said.

However, the enterprise market showed the weakest overall growth of Cisco's four customer categories: commercial, consumer, enterprise, and service provider. Spending by business-technology managers remains cautious, although it's improving, Giancarlo says. "It's the same caution that we've seen for a long time," he says. "But we're pretty pleased with our overall performance. We think we picked up market share in switching and routing, as well as in IP telephony and security."

Other areas that showed strong growth were storage area networks, which posted gains of 70% year over year, as well as wireless and security products. "We've never seen as much activity or interest in security as we do now," Chambers said.

Two areas that Cisco is looking at in terms of future growth are the data center, where Chambers sees a growing opportunity to provide technology to help companies virtualize resources like processing power and storage, and making networks more sensitive to and aware of applications.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
10 Top Cloud Computing Startups
Cynthia Harvey, Freelance Journalist, InformationWeek,  8/3/2020
Commentary
How Enterprises Can Adopt Video Game Cloud Strategy
Joao-Pierre S. Ruth, Senior Writer,  7/28/2020
Commentary
Conversational AI Comes of Age
Guest Commentary, Guest Commentary,  8/7/2020
White Papers
Register for InformationWeek Newsletters
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Video
Current Issue
Special Report: Why Performance Testing is Crucial Today
This special report will help enterprises determine what they should expect from performance testing solutions and how to put them to work most efficiently. Get it today!
Slideshows
Flash Poll