Cisco Systems reported a strong increase in revenues for its fiscal fourth quarter to July, up 6 percent to USD 12.8 billion, at the high end of guidance. Net profit rose 57 percent to USD 3.8 billion, helped by the US corporate tax reform, and EPS was up 69 percent to USD 0.81, well ahead of the company's outlook.
Growth was led by higher subscription sales, with recurring revenue up by 1 percent point year-on-year to 32 percent of total revenue. Product revenue increased 7 percent, and service revenue rose 3 percent, led by a 12 percent increase in Security, 10 percent growth in Applications and 7 percent higher revenues from Infrastructure. By region, EMEA showed the strongest growth at 8 percent, followed by APJC at 6 percent and the Americas up 5 percent.
The company grew deferred revenue by 6 percent year-on-year to USD 19.7 billion. Subscription and software offers led a 15 percent rise in deferred product revenue, and the portion of deferred product revenue related to recurring software and subscription offers increased 23 percent. The total product backlog was worth USD 6.6 billion at the end of July, up 38 percent from a year earlier.
FY profit lower
Over the full fiscal year, Cisco grew revenues 3 percent, while net earnings tumbled to USD 0.1 billion from USD 9.6 billion due to charges for repatriating cash from abroad. Excluding one-time items, profit rose 5 percent to USD 12.7 billion. Of the company's USD 46.5 billion in cash at the end of the year, USD 40.4 billion was in the US.
Cisco expects the growth to continue in Q1 and forecast sales up 5-7 percent in the October quarter. EPS is estimated at USD 0.69-0.74.
