Cisco Growth Continues with Sales up 4% in April Quarter

Cisco reported revenues for its fiscal third quarter to April of USD 12.5 billion, up 4 percent year-on-year. This was the company’s second consecutive quarter of growth and in line with Cisco’s outlook. The company forecast fiscal Q4 revenues up 4-6 percent year-on-year.

Earnings exceeded Cisco’s guidance in Q3, growing 12 percent to USD 0.56 per share. Net profit rose 7 percent to USD 2.7 billion. In Q4, Cisco expects EPS of USD 0.55-0.60, or USD 0.68-0.70 on an adjusted basis.

Cisco said it continued to make progress on its strategy of earning more sales from software and subscriptions. Recurring revenue reached 32 percent of revenues in Q3, up 2 percent points from a year ago. Total service revenue rose 3 percent, while product revenues were up 5 percent in the quarter. Cisco said product revenue performance was “broad based”, with growth in Infrastructure Platforms of 2 percent, Applications up 19 percent and Security increasing 11 percent.

Cisco’s operating cash flow fell 28 percent to USD 2.4 billion in Q3, hurt by a one-time tax payment of USD 1.3 billion for foreign cash. Excluding this, operating cash flow was up 11 percent year-on-year. The company also spent USD 6 billion repurchasing shares during the quarter. Its cash position fell to USD 54.4 billion from USD 73.7 billion three months earlier. – Telecom Paper