Wednesday, August 11, 2010

UPDATED: "Cisco: Thanks For Nothing, John; More Pain For Tech Thursday?" Reactions and Notes from the Conference Call (CSCO)

That's Eric Savitz, probably the best reporter working Silicon Valley.
From Tech Trader Daily:
Well, that’s not at all what the Street wanted to hear from Cisco Systems (CSCO).
The company, which saw the last downturn in the tech sector long before most other companies were talking about it, today reported disappointing results for its fiscal fourth quarter ended July, and said some scary things about what it is hearing about customer attitudes about spending.

Revenue was a little light of expectations, but the trouble runs a lot deeper than that. In particular, the guidance for the October quarter was short of Street expectations. CEO John Chambers noted on the company’s conference call with the Street that it saw softening business in the mid-June to mid-July time period, but added that they strengthened after that. The company’s margins were short of expectations, due in part to higher component costs. Worst of all, Chambers reported that Cisco’s customers were showing unusual conservatism in their buying habits and outlook....MORE
Here's the updated part of Savitz' earlier post "Cisco Q4 About In Line; Revs $10.8B; Non-GAAP EPS 43 Cents; Q1 Rev Guidance Misses Ests; Stock Falls In Late Trade (Updated)":
...Update: CEO John Chambers said on the company’s post-report conference call that this was “a very strong quarter for Cisco.” They company had record revenue, toward the high end of guidance. Non-GAAP net income was also a record, up 36%. Revenue was $622,000 per employee. Book-to-bill was slightly above one.
Other items from the call:
  • Cisco added 2,000 staff in the quarter not including acquisitions. Chambers says the company will continue to hire. Over 70% of the additions were in the U.S., and over 600 of those were in California.
  • Geographic breakdown, based on orders: Overall, orders were up 23% from a year ago. Emerging markets up 35%; Europe was up in the mid-20s. Asia/Pacific and North American were up about 20%. Japan was flat. India and Switzerland were up over 50%. Canada, Brazil and Mexico grew 40% or better.
  • On a customer segment basis: Public sector, enterprise were up 23-25%. Consumer was flat. Service provider was up in the high teens.
  • Advanced technology revenue was up 27%, switching 27%, routing 15%. CRS family was up 20%, with $1.2 billion annualized running rate.
  • Supplier lead times have come down but are still longer than they would like. Chambers said product lead times to customers are now within normal range.
  • Chambers sees some challenges in terms of GDP growth, job growth, and demand in Europe. He says customers are showing “an unusual amount of conservatism and even caution.”...MORE
And yet another Cisco post "Cisco: Staffing Up; 3,000 Hires In 2 Qtrs, 3,000 More To Fill".

The guy is a machine. During earnings season I've seen him put up over twenty-five posts per day, original content with calls to analysts, etc. Just an awesome business journalist.