Cisco CEO Chuck Robbins said the company had a "good quarter despite a challenging global business environment". Product revenue was down by 1 percent, while services revenue increased by 7 percent. Product revenue performance was led by Security and NGN Routing, which increased 11 and 6 percent, respectively, while Switching decreased 7 percent, Collaboration and Data Center each decreased 3 percent, and Wireless and Service Provider Video each decreased 2 percent.
On a geographic basis, growth was strongest in the APAC region, with sales up 6 percent, while the Americas dropped 1 percent and the EMEA region was flat. Product orders showed a similar trend across the regions and were down in total 2 percent year-on-year. The drop was led by a 12 percent fall in orders from the service provider segment.
Cisco's gross margin improved to 65.2 percent in Q1 from 64.5 a year ago, driven by productivity improvements, partially offset by pricing and to a lesser extent product mix. Operating costs rose 5 percent, due mainly to an increase in restructuring charges; on an adjusted basis, costs rose 1 percent. Headcount fell in the three months by 1,326 to 72,385, as part of the earlier announced plan to cut over 5,000 jobs. Cisco's operating profit was still down 7 percent year-on-year to USD 2.9 billion.
