Cisco Q4 net up 79 p.c YoY, margins fall

SAN FRANCISCO, USA: Cisco Systems, the world's largest computer networking equipment maker, reported a net profit of US$1.94 billion in the fourth quarter, which is up 79 percent from the $1.08 billion in the same quarter last year.

Total revenue for the quarter jumped 27 per cent to $10.8 billion. For the fiscal year 2010, Cisco had sales of $40 billion, an 11 per cent increase from the previous year.

However, the strong revenue and profits were tempered by mixed signals from customers around the globe nervous about the wobbly global economy. The company's gross margins declined for the second consecutive quarter to 62.7 percent from 64 percent.

The results were in line with Wall Street's expectations. Analysts polled by Thomson Reuters were expecting adjusted earnings of 42 cents a share on revenue of $10.87 billion. Earnings were 33 cents a share — or 43 cents a share excluding certain charges.

“We are very pleased with our results for the fourth quarter, achieving a total revenue increase of approximately 27 percent year over year at the upper end of our guidance, alongside the exceptional quality of our earnings,” Cisco chief financial officer Frank Calderoni said in a statement.

Commenting on the results, Cisco CEO John Chambers said that double-dip recession is “relatively low”. However, warned of an “unusual uncertainty” in the economy.

Cisco added 2,000 employees to its ranks during the quarter, 70 per cent of which were in the United States, including 600 in California. During the previous quarter, the networking giant added 1,000 employees. Chambers said he expects the company to add three thousand additional employees in the next several quarters.