Cisco Reports Solid Revenue, Growth In First Quarter

Cisco Systems Inc. on Tuesday reported a strong 29 percent increase in profits on an 17 percent jump in revenues to $6 billion, due to strong sales in its enterprise product lines as well as in home networking and IP telephony.

The San Jose, Calif.-based, networking-equipment maker said profits for the quarter ended October 30 were $1.4 billion, or 21 cents per share, on sales of $6 billion. Cisco earned $1.1 billion, or 15 cents per share, on sales of $5.1 billion in the same period last year.

Analysts were expecting San Jose-based Cisco to earn 21 cents per share on sales of about $6.02 billion. In August, Cisco said it expected revenues to be up 16 percent to 18 percent over last year

"Cisco started the fiscal year with solid results across nearly all of our key financial metrics, highlighted by a record-breaking quarter in terms of GAAP net income and earnings per share, and our sixth consecutive quarter of sequential revenue growth," John Chambers, president and CEO, Cisco Systems said in a statement. "Our execution also remained solid across our key product categories, industry segments, advanced technologies and geographies."

Chambers continued, "As customers integrate data, voice and video across a combination of networks, they are asking for a common technology architecture to deliver networked applications and services in a way that is transparent to the end user. And, as Cisco approaches its 20th anniversary, we believe we are uniquely positioned, based on our strategy of investing across customer markets, emerging geographic markets, as well as in both technology and business architectures, to address the future evolution of networking - the Intelligent Information Network."During the first quarter, Cisco completed the acquisition of Actona Technologies, Inc. for $90 million; the acquisition of dynamicsoft, Inc. for $69 million; the acquisition of Parc Technologies Limited for a $14 million; the acquisition of P-Cube Inc. for $213 million; and the purchase of certain assets of Procket Networks, Inc. for of $92 million.

Cash flows from operations were $1.5 billion for the first quarter of fiscal 2005, compared with $1.0 billion for the first quarter of fiscal 2004, and compared with $2.1 billion for the fourth quarter of fiscal 2004.

In a conference call discussing the results, Chambers noted that Cisco is facing a new competitors from Asia, most notably China, and that he expects that the competition will increase in the future.

He said that Cisco's strategy positions the company to do well against this new tide of competition. He sees increased opportunities in the integration of data, voice and video services. Chambers added that he believes that Cisco will also benefit from enterprise networks, home networks HotSpots, and service providers coming together across a common technology architecture. He also noted that enterprises are increasingly demanding service and support, not just hardware, and so are looking for companies, like Cisco, that can provide global services.