Cisco Shows Strength In Q4, Chambers Proclaims Improving Outlook

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Cisco will also continue to emphasize its partnerships, and Chambers called out data center, virtualization and software partnerships with Citrix, Microsoft, EMC and NetApp among the highlights. VCE, Cisco's contentious joint venture with EMC for developing Vblock converged infrastructure, saw order growth of about 50 percent during the quarter and is having "very strong" traction, Chambers said.

During the earnings call, Cisco was asked several times about the emerging software-defined networking (SDN). Chambers argued Cisco has set the pace for virtualization's role in the network.

"We saw virtualization coming early," he said, citing Cisco's 2009 introduction of the Nexus 1000V switch. "Our view [of SDN] is that you're looking at multiple years out in terms of impact one way or the other."

"We think the future is going to be hardware and software combined," added Chambers, who also proclaimed faith in Cisco's relationship with VMware despite VMware's potentially competitive $1.2 billion acquisition of SDN player Nicira. "Our goal is to lead this evolution along with our partners."

Among other product highlights and lowlights during the quarter, Cisco saw an 8 percent decline in collaboration, which Chambers attributed to decreased spending on video telepresence largely in public sector and European markets. On the flipside, however, Cisco Jabber -- the company's platform for embedding UC functions onto various devices and operating systems -- has gained what Chambers called "significant traction," and has seen an increase of 55 percent in licensing volume.

Another major highlight for Cisco during its fiscal 2012 was its expanding services portfolio. Smart Services, around which Cisco launched a sweeping new partner program at this year's Cisco Partner Summit, grew orders 240 percent during the year.

For its fiscal first quarter 2013, Cisco projected revenue growth to be 2 percent to 4 percent, excluding any potential benefit from its recent $5 billion acquisition of U.K. media software powerhouse NDS. Cisco CFO Frank Calderoni said that NDS is expected to be a $200 million revenue contributor, and with NDS counted, Cisco will grow 4 to 6 percent year over year in Q1 FY 13.

Cisco noted continued improvements in the Americas and Asia Pacific, Japan and China segments, though kept to a grim forecast for Europe -- which "is going to get worse before it gets better," Chambers noted -- and the federal government.

Cisco Wednesday also said it would pay a quarterly dividend of $0.14 per common Cisco share. It will be paid on Oct. 24, 2012, to all shareholders of record at the close of business on Oct. 4. Cisco's previous quarterly dividend, $0.08 per common share, was paid on July 25.


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