Cisco's revenues turned lower in its fiscal third quarter to April, down 8 percent year-on-year to USD 12.0 billion, and net earnings fell 6 percent to USD 0.65 per share. The company said it expects a further decline in the July quarter, with revenues down 8.5-11.5 percent annually and EPS of USD 0.57-0.62.
The fall in Q3 revenue was felt around the world, with a drop of 8 percent in the Americas, 7 percent in EMEA and 9 percent in APJC. Total product revenue fell 12 percent, led by a 15 percent fall in the main infrastructure segment, offset by 6 percent growth in security. Services revenue also grew 5 percent.
Cisco improved the gross margin to 64.9 percent from 63.1 a year ago. Operating costs also were down 6 percent year-on-year, or a fall of 9 percent on an adjusted basis. Operating profit still fell 3 percent to USD 3.4 billion.
CFO Kelly Kramer said the company "executed well in Q3 in a very challenging environment, delivering strong margins and non-GAAP EPS growth". This will helped by the continued focus on software subscription revenues, with increased their share of software revenue 9 percent points in the past year to 74 percent of the total.
Looking ahead, product orders were down 5 percent year-on-year in the quarter, led by a 22 percent fall in the Asia region. Demand fell most in the commercial sector, with orders down 11 percent, while the enterprise segment dropped 4 percent, and service provider orders declined 3 percent.
