Cisco’s Q1 Earnings Higher than Expected

Cisco’s first quarter earnings was a success and even beat Wall Street expectations. As a result, Cisco’s investors are gaining more and more confidence with its play in the ever evolving tech industry.

Quoting Cisco CEO John Chambers, Cisco was able to operate in a “slow, but steady economic environment” which has led the company to a slow but steady growth. The growth is evident with 7 percent revenue in the Americas region as well as a 10 percent growth in sales in other emerging markets. This slow but steady growth has helped offset losses in China and the European market. Cisco has a net income of US$2.48 billion, or 46 cents per share – a good $2.17 billion more than the previous year. Revenue is also up by 5.4 percent and is $12.22 billion.

Cisco has gone from switches and routing equipment to wireless and cloud services and has suffered a great deal in the transition process. Even with the changing market, Cisco has successfully addressed the new market’s needs with its data center equipment, wireless equipment and online video service providers. There was a 30 percent revenue increase in its sales to service providers which makes online video available, a 27 percent increase in sales with wireless equipments and a rise of 77 percent on the quarter with its data center equipment segment.

In 2009, Cisco has teamed up with EMC, a VCE creation in an attempt to gain better competition with IBM and HP. “Overall, Cisco is far more focused than they were, and their partnership with EMC is paying off well. They are also partnering with Intel and getting ahead of what likely will be a big hardware changeout that looked like it was going to wipe them out by catching them unexpected. Rather than fight Intel, Cisco jumped on board recognizing that any other play would have been fatal. In short, at the moment they are on their game,” said Enderle Group Principal Analyst Rob Enderle.

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