By Jesse Emspak: Subscribe to Jesse's RSS feed
August 12, 2010 12:12 PM EDT
Cisco Systems reported strong year-over-year results for the fourth quarter of fiscal 2010, with a strong showing in both earnings and revenue in the wake of three acquisitions. But the company expressed some caution that the recovery might not be strong enough to keep that level of growth.
The company reported $1.9 billion in net income on $10.8 billion in sales, as compared with $1.1 billion and $8.5 billion at the same time a year earlier. Earnings per share were $0.33, an increase of 39 percent over the previous year.
For the fiscal year, Cisco said it had $40 billion in net sales, yielding $7.8 billion in income and $1.33 per share.
Cisco was not shy about acquisitions during the quarter, as the company bought CoreOptics Inc., MOTO Development Group and DVN Ltd.
During a conference call, Chief Financial Officer Frank Calderoni said that the trends are good, but that the larger economy is giving mixed signals.
For example, he said, there was some softening of customer orders in June and July, and some of the order growth rates were up to 10 percent lower than average. But growth in some regions was quite robust, as in Europe.
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"The European operations didn't have as tough a quarter as we thought they might," he said. "For Europe to grow 20% is really good."
Chief Executive Officer John Chambers echoed that sentiment, pointing to the comments from the Federal Reserve that the economic recovery might be weaker than expected.
UBS Analyst Nikos Theodosopoulos said he sees a "flattish" trend for the next few months, as government spending will be lower than normal, though that will be balanced by better enterprise growth.
Mark McKechnie, analyst at Gleacher & Company, noted that Cisco ran into some problems with its supply chain earlier, but seems to have weathered them. He noted that Cisco is under some pressure in terms of market share, but that is offset by demand for its new products.
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