Summary
Cisco Systems, Inc. (CSCO) reported its first quarter results for fiscal year 2012, ending October 29, 2011. The company saw a modest 4.7% increase in total net sales to $11.26 billion, driven by a 12.4% rise in service revenue, while product sales grew by 2.9%. Geographically, the Americas and APJC segments showed stronger growth compared to EMEA. The company's gross margin declined by 1.6 percentage points year-over-year to 61.2%, primarily due to higher sales discounts and unfavorable product mix, though this was partially offset by lower manufacturing costs. Restructuring and other charges of $202 million impacted operating expenses. Net income decreased by 7.9% to $1.78 billion, resulting in diluted earnings per share of $0.33, down from $0.34 in the prior year period. Cisco continued its significant share repurchase program, buying back $1.5 billion in stock during the quarter and paid its first cash dividend. The company highlighted ongoing product transitions, strategic focus areas including collaboration and data center virtualization, and cautioned about macroeconomic uncertainties, particularly in Europe and the public sector.
Financial Highlights
53 data points| Revenue | $11.26B |
| Cost of Revenue | $4.37B |
| Gross Profit | $6.89B |
| Operating Expenses | $4.68B |
| Operating Income | $2.21B |
| Interest Expense | $148.00M |
| Net Income | $1.78B |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 5.39B |
| Shares Outstanding (Diluted) | 5.41B |
Key Highlights
- 1Total net sales increased by 4.7% to $11.26 billion, driven by strong service revenue growth.
- 2Product sales saw a more modest increase of 2.9%, with mixed performance across product categories and geographic regions.
- 3Gross margin declined by 1.6 percentage points to 61.2% due to increased discounts and unfavorable product mix, partially offset by cost savings.
- 4Restructuring charges of $202 million were recorded in the quarter, impacting operating expenses.
- 5Net income decreased by 7.9% to $1.78 billion, with diluted EPS falling to $0.33.
- 6Cisco repurchased $1.5 billion of its common stock and paid its first cash dividend of $0.06 per share.
- 7The company reported strong growth in Collaboration (up 11.9%) and Data Center (up 107.2%) product sales, while Switching and NGN Routing saw slight declines or were flat.