What was Cisco's overall financial performance in this quarter?

Cisco reported a modest 1.8% increase in total revenue to $12.085 billion. However, net income and diluted EPS declined by 4.6% and 5.1% respectively, to $1.996 billion and $0.37 per share. This was largely due to significant restructuring charges and acquisition-related expenses.

What were the primary drivers of the revenue change?

Product revenue grew by 1.1% to $9.397 billion, and service revenue increased by 4.2% to $2.688 billion. The overall revenue growth was positively impacted by performance in the Americas and EMEA regions, but this was partially offset by a decline in the APJC region and weakness in service provider and emerging market orders.

What impacted Cisco's profitability during the quarter?

Profitability was negatively impacted by $237 million in restructuring and other charges related to a workforce reduction announced in August 2013. Additionally, a $257 million compensation expense linked to the agreement to purchase the remaining interest in Insieme Networks, Inc. also reduced net income. These factors contributed to a decrease in operating income margin.

How is Cisco returning capital to shareholders?

Cisco continued its capital allocation strategy by declaring and paying cash dividends of $0.17 per common share, totaling $914 million. The company also repurchased approximately 84 million shares of common stock under its repurchase program for $2 billion.

CSCO 10-Q Quarterly Report Q1 FY2014 — Revenue, Net Income, EPS

Summary

Cisco Systems, Inc. (CSCO) reported its financial results for the first quarter of fiscal year 2014, ending October 26, 2013. The company experienced a modest 1.8% increase in total revenue to $12.085 billion, driven by a 1.1% rise in product revenue and a 4.2% increase in service revenue. However, net income saw a decline of 4.6% to $1.996 billion, translating to diluted earnings per share of $0.37, down from $0.39 in the prior year's comparable quarter. This decrease was impacted by significant restructuring and other charges, including a $237 million charge related to a workforce reduction and a $257 million compensation expense associated with the acquisition of Insieme Networks, Inc. The company's operating income margin also decreased by 2.0 percentage points to 20.3%. Geographically, the Americas and EMEA segments showed revenue growth, while the Asia Pacific, Japan, and China (APJC) segment experienced a revenue decline. Cisco highlighted weakness in product orders from service provider customers and emerging countries, impacting overall revenue growth below expectations. Despite these challenges, Cisco continued to return capital to shareholders through dividends and stock repurchases, demonstrating a commitment to capital allocation.

Financial Highlights

58 data points

Beta

Revenue

$12.09B

0.6% Gross Margin

Net Income

$2.00B

0.2% Net Margin

EPS (Diluted)

$0.37

Total Assets

$100.74B

Cash & Equivalents

$5.25B

Free Cash Flow

$2.33B

Financial Statements

Beta

Revenue	$12.09B
Cost of Revenue	$4.68B
Gross Profit	$7.41B
R&D Expenses	$1.72B
Operating Expenses	$4.95B
Operating Income	$2.46B
Interest Expense	$140.00M
Net Income	$2.00B
EPS (Basic)	$0.37
EPS (Diluted)	$0.37
Shares Outstanding (Basic)	5.38B
Shares Outstanding (Diluted)	5.43B

Key Highlights

1Total revenue increased by 1.8% year-over-year to $12.085 billion.
2Net income decreased by 4.6% to $1.996 billion, with diluted EPS falling to $0.37 from $0.39.
3Significant restructuring and other charges ($237 million) and acquisition-related compensation ($257 million) impacted profitability.
4Product revenue grew 1.1% to $9.397 billion, while service revenue grew 4.2% to $2.688 billion.
5The company experienced weakness in product orders from service providers and emerging countries, affecting revenue growth.
6Operating income margin declined by 2.0 percentage points to 20.3%.
7Cisco continued its capital allocation strategy, paying $914 million in dividends and repurchasing $2 billion in common stock.

CISCO SYSTEMS, INC. Quarterly Report for Q1 Ended Oct 26, 2013

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions