Wireless, VoIP Fuel Cisco's Sales
Cisco's earnings grew nearly 28 percent and revenue nearly 25 percent for its first quarter of fiscal 2007, ended Oct. 28, the company reported Wednesday.
"Many of the market transitions we anticipated are converging today as more and more communications and IT capabilities are moving into the network," said John Chambers, president and CEO of Cisco Systems, San Jose, Calif., during a conference call with financial analysts. "We believe we are gaining market share versus almost all of our competitors, but we also believe we are getting a larger share of our customers' total spend on communications and IT."
For the quarter, earnings rose to $1.61 billion, or 26 cents per share, up from $1.26 billion, or 20 cents per share, the same quarter a year ago. Revenue climbed to $8.18 billion, up from $6.55 billion a year ago.
Cisco's Scientific-Atlanta set-top box business, acquired earlier this year for $6.9 billion, contributed sales of $584 million during the quarter.
Revenue from routers grew 13 percent year over year, while switch revenue jumped 15 percent. Sales of advanced technologies grew 23 percent, excluding Scientific-Atlanta. Wireless led the growth among Cisco's advanced technologies with a sales increase of 40 percent. Unified communications grew approximately 30 percent, networked home products grew in the low 30 percent range, storage grew in the mid-teens and security saw high single-digit growth, Chambers said.
Cisco also launched several new products during the quarter, including its TelePresence Meeting line of high-definition videoconferencing wares, its Digital Media System for on-demand video delivery and its Wide Area Application Services lineup of WAN optimization appliances.
For the second quarter, Cisco expects revenue growth of 24 percent to 25 percent over year-ago results. Cisco expects full-year revenue growth for fiscal 2007 to hit the higher end of its previously disclosed projected range of 15 percent to 20 percent. Shares of Cisco closed up 26 cents at $25.10 Wednesday prior to the announcement.