Cisco posts solid Q3 results, manages dicey IT spending
Cisco holds up well during the third quarter in "a cautious IT spending environment," avoiding the shortfalls rivals have faced.
Cisco Systems' fiscal third quarter results were solid as the company avoided the shortfalls rivals faced.
The company reported third-quarter earnings of $2.2 billion, or 40 cents a share, on revenue of $11.6 billion, up 6.6 percent from a year ago. Non-GAAP earnings were 48 cents a share.
Wall Street was expecting earnings of 47 cents a share on revenue of $11.59 billion. Going into Cisco's earnings, analysts were expecting a mixed quarter. After all, Cisco rivals Juniper, Riverbed and Polycom all struggled with their most recent financial results.
In a statement, Cisco CEO John Chambers said the company plans to grow profits faster than revenue. "In a cautious IT spending environment, we continue to outperform our competitors," he said.
On a conference call, Cisco CEO John Chambers said:
- The company has taken share in the service provider market. "We remain number one or number two in almost every product market where we play," said Chambers.
- Cisco maintained share in the enterprise and commercial market.
- UCS server revenue was up 57 percent from a year ago.
By the numbers:
- Research and development spending was $1.36 billion in the third quarter, down from $1.43 billion a year ago.
- Inventory turns were 11.5 in the third quarter, up from 11.1 a year ago.
- Cisco ended the quarter with $48.4 billion in cash and equivalents.
- Cisco generated $3 billion in cash flow in the third quarter.
- Days sales outstanding were 31, down from 37 a year ago.