Network equipment maker Cisco reported a 13% drop in
year-on-year sales to $9bn for the first quarter of its 2010
financial year, which pushed down earnings 19% to $2.1bn.
Cisco CEO John Chambers said the previous quarter had been a
tipping point. "We view the improving economic outlook, combined
with solid execution on our growth strategy, as creating
unparalleled opportunity to drive more value into the core of the
network," he said.
Chambers said collaboration, virtualisation and video would
drive productivity and growth in network loads for the next decade.
They were evolving even faster than expected, he said.
Chambers said that collaboration along the lines of the recent
"ecosystem-shifting coalition" between Cisco, EMC and VMware "may
be the most profound opportunity for businesses in our 25 years as
a company".
"Our build-buy-partner innovation engine is clearly running on
all cylinders," Chamber said, adding that execution and results
over time would show the long-term impact of this strategy.
Despite Chambers' optimism, a change in accounting rules
inflated Cisco's figures by $50m, and general and administration
costs rose $45m to $440m despite tight cost control elsewhere in
the organisation.
During the quarter Cisco expanded its telepresence portfolio,
adding AT&T, BT, Orange, NTT, Tata Communications, Telefonica,
Telstra and Telmex as telepresence service providers. The company
also announced its borderless networks architecture strategy,
together with its new-generation integrated services router, and
said it would integrate its call centre products with
Salesforce.com's latest cloud service for small and medium-sized
companies to run their customer services completely in the
cloud.