Summary
Cisco Systems, Inc. reported solid revenue growth of 19.2% year-over-year for the first quarter of fiscal year 2011, reaching $10.75 billion. This growth was driven by strong performance across all geographic segments and product categories, particularly Switches and New Products (collaboration and data center offerings). However, gross margin percentage saw a decline of 2.5 percentage points to 62.8%, primarily due to higher sales discounts, unfavorable product mix, and carryover effects from fiscal 2010 supply constraints. Despite challenges like slowing business momentum in certain European markets and public sector segments, Cisco's financial position remains robust with $38.9 billion in cash and cash equivalents and investments. The company also continues its significant share repurchase program, authorizing an additional $10 billion in buybacks. Looking ahead, Cisco anticipates slower revenue growth in the second quarter of fiscal 2011 and potential increases in operating expenses as a percentage of revenue, which may lead to a year-over-year decline in operating income, net income, and earnings per share.
Financial Highlights
52 data points| Revenue | $10.75B |
| Cost of Revenue | $4.00B |
| Gross Profit | $6.75B |
| Operating Expenses | $4.40B |
| Operating Income | $2.35B |
| Interest Expense | $166.00M |
| Net Income | $1.93B |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.34 |
| Shares Outstanding (Basic) | 5.59B |
| Shares Outstanding (Diluted) | 5.67B |
Key Highlights
- 1Net sales increased by 19.2% year-over-year to $10.75 billion, demonstrating strong top-line growth.
- 2Gross margin percentage declined by 2.5 percentage points to 62.8% due to pricing pressures, product mix, and supply chain impacts.
- 3Operating expenses as a percentage of revenue decreased slightly to 41.0%, indicating efficient cost management relative to revenue growth.
- 4Diluted earnings per share increased by 13.3% to $0.34, reflecting both net income growth and a reduced share count from repurchases.
- 5The company ended the quarter with a substantial cash and investment balance of $38.9 billion, providing financial flexibility.
- 6Cisco announced an additional $10 billion stock repurchase authorization, underscoring its commitment to returning capital to shareholders.
- 7Management anticipates slower revenue growth in the next quarter and potential year-over-year declines in profitability due to market headwinds.