Cisco reported better-than-expected results for its fiscal second quarter to January. Revenues were flat year-on-year at USD 12.0 billion, compared to declines of 9 percent in the previous two quarters. Net profit fell 12 percent to USD 2.5 billion or USD 0.60 per share, but was better than Cisco's guidance for around 55 cents. The company announced a 3 percent increase in its quarterly dividend, to USD 0.37 per share.
Product revenue fell 1 percent, while service revenue was up 2 percent. Product revenue was led by growth in security, up 10 percent, while infrastructure platforms fell 3 percent and applications were flat. Cisco said product orders were growing, up 1 percent year-on-year, with strengthen in the Catalyst 9000 range, data centre switching, security, wireless and Webex.
Across the various regions, revenues fell 1 percent in the Americas and 4 percent in APJC, but grew by 2 percent in EMEA in Q2. Worldwide the gross margin reached 65.1 percent, up from 64.7 percent a year ago.
The company's operating profit was down 5 percent to USD 3.2 billion, after a 4 percent annual increase in operating costs. Operating cash flow dropped 22 percent to USD 3.0 billion.
Cisco paid out USD 1.5 billion in dividends and spent USD 801 million on its share buyback during the quarter. The company ended the period with USD 30.6 billion in cash.
The takeovers of Banzai cloud and Portshift were completed in Q2, and Cisco expects to close the acquisitions of Acacia and IMImobile in Q3. The company forecast a return to revenue growth in Q3, of 3.5-5.5 percent year-on-year, EPS of USD 0.64-0.69 and adjusted EPS at USD 0.80-0.82.
