Saturday, September 8, 2012

Cisco Earnings Review: Strong Financial Rebound!

Cisco reported QE July 2012 financial results on August 15

CEO John Chambers has navigated Cisco above the financial performance lows of 2011 and this QE July was strong. Chambers has restructured, cut costs, increased dividends, continues stock repurchasing, and has achieved better bottom line results. In fact, this was the best QE July ever reported by Cisco. This is especially encouraging considering this is also typically the weakest quarter on an annual cyclical basis.

Current year on year revenues growth was a somewhat light +4.4%, compared to the recent average of about 6%. The historically volatile YoY earnings per share growth was a very impressive +64%. The prior two quarters have also been solid for YoY EPS at +21% and +48%.

The only real negative was a lower gross margin of 60.61%, a 6-quarter low. This prevented the QE July from being a surprising home run instead of a double off the wall. However, Cisco has rebounded significantly in the past year as evidenced by this being the primary criticism.

GAAP Financial Result, QoQ Change, YoY Change
Total Assets: $91.76 billion, +1%, +5%
Total Revenues: $11.69 billion, +1%, +4%
Net Income: $1.92 billion, -11%, +56%
Earnings per Share: $0.36, -10%, +64%
Cash Flow per Share $0.58
1-Year Return on Assets +9.01%

Cisco Outlook QE October 2012 The guidance is slightly weak QoQ but relatively strong YoY. Revenues continue to slowly grind higher. The QE October earnings per share should normally be a stronger rebound QoQ than forecast by management.
Non-GAAP Earnings per Share: $0.45 to $0.47
Prior Quarter: $0.47
Prior Year: $0.43
Revenues YoY: +2% to +4%

"As a result of our strong performance, continued execution on our plan to deliver profitable growth, and commitment to shareholders, for the full fiscal year, we delivered revenue growth of 7% as well as a record year in revenue and earnings per share," stated Cisco Chairman and CEO John Chambers.

"Our strategy -- delivering intelligent networks and technology architectures, built on integrated products, services and software platforms, to fuel our customers' businesses -- is proving the right long-term strategy for our success. There is no question that our industry and our world are evolving quickly and Cisco is squarely at the center of major technology market transitions -- cloud, mobile, visual, virtual and social."

Chambers Explains Cisco's Earnings John Chambers, Cisco Chairman & CEO, offers insight on the firm's latest quarter. Q4 was unusually strong, he says, particularly in Asia.


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