Cisco's sales sagged almost a fifth as profits plummeted in
the fourth quarter, dragging down the world's leading
communications equipment maker's full year results, but tight cost
control grew the firm's cash pile.
Q4 sales dropped 18% year on year to $8.5bn, nearly halving net
income for the quarter to $1.1bn. Sales for the full year were down
9% to $36.1bn, leaving net income for the period off by almost a
quarter to $6.1bn, and earnings for the year lighter by 13.5% at
£1.35bn.
Cash flows were $2bn, down from $3.5bn year on year, but flat
compared to the previous quarter. Cash flows for the full year were
$9.9bn, down from $12.1bn for fiscal 2008.
Cash, cash equivalents and investments were $35bn, up from
$26.2bn at the end of fiscal 2008, and compared with $33.6bn at the
end of the third quarter of fiscal 2009.
CEO John Chambers remained upbeat. He said the economic
improvement showed up as rising sales, quarter on quarter. "If we
continue to see these positive order trends for the next one to two
quarters, there is a good chance we will look back and see that our
tipping point occurred in Q4," he said.
Chambers said Cisco's goal was to become a "next-generation
company".
"We see the network truly becoming the platform for innovation
and new business models which are enabled by collaboration
technologies," he said.
Over the past few months Cisco has moved from being a provider
of networking equipment to taking a more active role in running
datacentres, edging towards hosting unified communications
services, and expanding its consumer product lines.
It launched its Smart+Connected Communities initiative, the
first business initiative from its globalisation centre in
Bangalore, India. This provides a blueprint for "smart cities" that
run on networked information.
It also speeded up local innovation in China, and announced the
opening of a green technology R&D lab with Tsinghua
University.
During the year AT&T, BT and Tata Communications
demonstrated the technical ability for a Cisco TelePresence user to
call others on any carrier network with high levels of security and
reliability.