Chambers: Challenges Remain For Next Few Quarters

"In a year where there were a number of challenges, we were pleased with both our geographic balance and our year-over-year order growth," said John Chambers, chairman and CEO of Cisco Systems, San Jose, Calif., during a conference call to discuss fourth quarter and fiscal 2008 financial results.

Cisco maintains its long-term projections for 12 percent to 17 percent revenue growth, Chambers said. But given expectations that economic challenges "will remain with us for the next few quarters," Chambers said Cisco expects year-over-year revenue growth of 8 percent in the first quarter of fiscal 2009, and 8.5 percent for the second quarter. The company only disclosed projections for the first two quarters of the coming fiscal year rather than its usual full-year estimates.

For the quarter ended July 28, Cisco reported earnings of $2 billion, or 33 cents per share, up from $1.9 billion, or 31 cents per share, for the same quarter a year ago.

Revenue for the quarter climbed nearly 10 percent to $10.4 billion, up from $9.4 billion in the year-ago quarter.

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Chambers called it a record quarter from a revenue perspective, marking the first time Cisco hit the $10 billion mark for quarterly sales.

During the quarter, Cisco's year-over-year product revenue grew by 8 percent for routers, 5 percent for switches and 15 percent for the vendor's advanced technologies, led by unified communications at 20 percent growth and application networking services at 30 percent.

Orders grew by 7 percent in the U.S./Canada region for the quarter, Chambers said. U.S. enterprise orders grew by 13 percent year-over-year.

For fiscal 2008, Cisco reported earnings of $8.1 billion, or $1.56 per share, up nearly 10 percent from $8.4 billion, or $1.34 per share, in 2007. Revenue for the year hit $39.5 billion, up more than 13 percent from $34.9 billion in 2007.

Router revenues for the year grew by 14 percent, switches by 7 percent and advanced technologies by 21 percent, led by unified communications at 51 percent and application networking services by 36 percent, Chambers said.