Cisco Systems, the world's biggest Internet equipment vendor, reported fourth quarter earnings that beat Wall Street estimates on revenue of $11.2 billion.
The networking giant said net income was 40 cents a share, excluding some one-time costs, ahead of 38 cents forecast by analysts. Still, net income dropped to $1.23 billion, or 22 cents a share, from $1.94 billion, or 33 cents, a year ago.
The San Jose, California-based company has been trying to slash costs in a slowing market, especially as orders from government agencies ease. CEO John Chambers said orders from U.S. public sector customers rose only 7 percent. Revenue rose slightly to $11.2 billion.
Moreover, Chambers said Cisco expects order growth of only 1 to 2 percent in the current quarter. But he told investors the company does not expect to suffer from a global slowdown because it has repositioned itself by becoming more efficient.
Overall, Cisco orders rose 35 percent in the period ended July 31. As the industry's biggest supplier of switches and routers, orders are a key bellwether of data communications growth. Chambers said one of the fastest-growing sectors was the video sector, as companies and even government agencies order more equipment,
Cisco has been losing share to newer rivals, including Dell and Hewlett-Packard as well as Juniper Networks, Ciena and Huawei Technologies. "We've taken it pretty good to our competitors in the last quarter," Chambers said, although he acknowledged at times Cisco had to lower prices to maintain market share.
The company also reported cash and investments had risen to $44.6 billion, up slightly from the prior quarter. But Cisco didn't announce a new share buyback or an increase in its dividend, now only 43 cents a year. The company is authorized to buy back $10.2 billion in stock, though.