Cisco reported revenues down 1 percent year-on-year to USD 11.9 billion in its fiscal third quarter to April, in line with its outlook. Net profit still rose 7 percent to USD 2.5 billion thanks to its cost-cutting efforts, and EPS was up 9 percent to USD 0.50. Operating cash flow increased 10 percent to USD 3.4 billion.
Service revenue fell 2 percent during the quarter, while product revenue was flat. Product revenue performance was led by Wireless and Security, which increased by 13 and 9 percent, respectively, and switching revenue grew by 2 percent. NGN Routing, Collaboration, Data Center and Service Provider Video revenue decreased by 2, 4, 5 and 30 percent, respectively. On a geographic basis, sales in the Americas and EMEA were flat, and APJC was down 2 percent.
Cisco reported a product book-to-bill ratio over 1 for Q3, but product orders were down 4 percent in the quarter, led by falls of 6 percent in EMEA and 4 percent in the Americas. Only the commercial segment showed growth in orders, of 1 percent.
As a result, the company forecast a 4-6 percent drop in revenues for the fiscal fourth quarter July. Earnings are expected little changed, at USD 0.46-0.51 per share compared to USD 0.37 a year ago. To help offset the weaker sales, Cisco announced plans for another 1,100 job cuts. This is on top of the 7 percent workforce reduction announced last August and will result in another USD 150 million in pretax charges.
