Cisco CEO John Chambers Shows Signs of Optimism
Cisco Systems Inc. CEO John Chambers sounded cautiously optimistic today when the networking giant announced Q4 fiscal year 2011 results. Instead of looking back on layoffs and abandoned products, Chambers talked about progress that will position the company for the next stage of growth. The big question: Can Chambers really deliver that growth?
First, the official news: Cisco’s Q4 2011 net sales were $11.2 billion and net income was $1.2 billion. Both figures beat Wall Street’s estimates, and Cisco’s profit margins held up better than some analysts expected, according to Barron’s. New product revenues rose 7 percent during the quarter but Barron’s noted some key challenges for Cisco including:
- Router sales fell 2 percent during the quarter
- Switch sales fell 4 percent during the quarter
In a prepared statement, Chambers said:
“We’ve made significant progress on our comprehensive action plan to position ourselves for our next stage of growth and profitability, while delivering solid financial results in Q4. As we start our next fiscal year, you will see a very focused, agile, lean and aggressive company, that is laser focused on helping our customers use intelligent networks to transform their businesses.”
That certainly sounds promising. But plenty of questions remain. The VAR Guy has been tied up in meetings and didn’t have a chance to sit in on Cisco’s earnings call. But our resident blogger will be listening to a replay soon. Our resident blogger wants to get a better feel for Chambers’ tone, especially as it relates to competition, margins, and customer demand in the government vertical.
Cisco expects Q1 2012 revenue growth of 1 percent to 4 percent. Not exactly explosive growth but it’s still better than Wall Street had previously expected.