Cisco beats expectations with strong fourth quarter

9 Aug 2006

Greater spending on networks has helped to boost sales at Cisco, which reported increased revenues and profits for its fourth quarter.

Revenue for the last three months of the company’s 2006 fiscal year was US$7.98bn, up from US$6.6bn for the same quarter a year ago and an increase on the US$7.3bn recorded in the third quarter. For the entire financial year, Cisco recorded revenue of US$28.5bn and net income of US$5.6bn.

The results were better than analysts’ expectations and included a slight improvement in net income of US$1.5bn. Around a third of this profit came from Scientific-Atlanta, a manufacturer of set-top boxes for cable TV networks which Cisco acquired during the third quarter of the 2006 financial year.

“Cisco delivered a record quarter across the board, ending a fiscal year that demonstrated our strong momentum and balance across geographies, products and customer segments,” said John Chambers, president and CEO of Cisco Systems. He claimed the company was executing well and on target against its long-term strategy.

Chambers added that Cisco was “poised for continued growth” based on its ability to innovate and to stay ahead of changing markets. “Not only is the network becoming the primary driver of IT and communications, it is becoming the platform for life’s experiences,” he said. “Our ability to anticipate these changes and execute on our strategy is increasing our market share as well as our share of our customers’ total IT spend.”

By Gordon Smith