Cisco reported revenues of USD 12.1 billion for its fiscal first quarter to October, down 2 percent from a year earlier in line with its outlook. Net income rose 3 percent to USD 2.4 billion, and EPS was up 4 percent to USD 0.48, at the low end of its forecast range. For fiscal Q2, Cisco forecast a return to revenue growth, a first in two years.
In the October quarter, service revenue already grew 1 percent, while product revenue was down 3 percent. All regions showed lower sales, with the Americas down 1 percent, EMEA down 3 percent and APJC down 1 percent. Product revenue performance was led by Security and Applications, which increased by 8 and 6 percent, while the main unit Infrastructure Platforms saw revenue decrease by 4 percent.
Despite lower revenues, all regions showed 1-2 percent higher orders in the quarter, Cisco said. This was led by demand from the commercial segment, where orders rose 12 percent, and the public sector, with orders up 3 percent. Orders were still falling from service providers (-6%) and businesses (-5%).
The higher orders mean Cisco expects a return to revenue growth in fiscal Q2. The company forecast revenue up 1-3 percent year-on-year and an adjusted gross margin of 62.5-63.5 percent versus 63.7 percent in the previous quarter. EPS is forecast to reach USD 0.46-0.51. The outlook does not include the takeover of Broadsoft, first announced in October.
