Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Cisco’s Chambers: Government Market Is Rocky, but U.S. Sales Are Getting Stronger

Cisco Systems has an uncanny way of being a predictor for the U.S. economy. It saw the first indicators of trouble in the banking sector in 2007 well before the financial crisis that hit in 2008 and 2009.

So what does CEO John Chambers see for 2013? Having just reported quarterly earnings that beat the expectations of analysts, he told me in a brief interview that if you set aside sales to the federal government, which aren’t very good, other sales in the U.S. are looking promising.

Here’s how sales to different segments of the U.S. market break down: Sales to the federal government were down by 15 percent. But sales to U.S. service providers were up by 13 percent. Sales to U.S.-based enterprises were up by 9 percent, and sales to commercial customers were up by 5 percent.

What’s it all mean? “Take out government and you start to have a robust run rate that looks like something good is happening in the U.S.,” he said.

What would make him more confident about this “something good?” Another quarter of the same thing, he said.

So now it’s time for me to pick the song, the only I always pick after Cisco reports earnings. I’ve actually picked two, but will post the other tomorrow morning. The first is “Going the Distance,” the training theme from the original “Rocky.” I’d like to think that if Chambers is right, the U.S. economy is in training to do something unexpected. Something good.


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