Arik Hesseldahl

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Cisco’s Q4 Results Beat Street Expectations, but Not by Much

cisco_signQuarterly results from networking giant Cisco Systems have just crossed the wires, and they’re good, but perhaps not good enough.

Cisco reported per-share earnings of 52 cents on sales of $12.4 billion. The EPS results were better than the 51 cents and $12.41 billion that analysts had forecast, but just beat them by a whisker. Sales fell slightly short.

Investors seem a little upset, as Cisco shares fell in after-hours trading by nearly three percent, to $25.65 a share.

Here’s Cisco’s announcement:

Cisco Reports Fourth Quarter and Fiscal Year 2013 Earnings

SAN JOSE, CA — (Marketwired — Aug 14, 2013) — Cisco (NASDAQ: CSCO)
Q4 Revenue: $12.4 billion (increase of 6% year over year)
Q4 Earnings per Share: $0.42 GAAP; $0.52 non-GAAP
FY 2013 Revenue: $48.6 billion (increase of 6% year over year)
FY 2013 Earnings per Share: $1.86 GAAP; $2.02 non-GAAP

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its fourth quarter and fiscal year results for the period ended July 27, 2013. Cisco reported fourth quarter revenue of $12.4 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.3 billion or $0.42 per share, and non-GAAP net income of $2.8 billion or $0.52 per share.

“My confidence in our ability to be the #1 IT Company is increasing. Our fourth quarter was a record on many fronts, with record revenue, and record non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share. In every case, we exceeded the midpoint of our guidance. We also generated $4 billion in operating cash flow in the quarter, another record,” stated Cisco Chairman and CEO John Chambers.

“Now, more than ever, our customers and our partners want Cisco’s help navigating the inconsistent global landscape successfully. They recognize the benefit of a partner who is not only the leader in their product categories, but can bring technologies and solutions together in an architecture to lower operating costs, reduce time to results, and future proof their investments.”

GAAP net income and GAAP earnings per share for the fourth quarter and fiscal year ended July 27, 2013 include the previously disclosed charge of $0.03 per share for the TiVo, Inc. (“TiVo”) patent litigation settlement. This charge was excluded from non-GAAP earnings per share. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table below.

Cisco will discuss fourth quarter and fiscal year 2013 results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

Cash and Cash Equivalents and Investments

Cash flows from operations were $4.0 billion for the fourth quarter of fiscal 2013, compared with $3.1 billion for the third quarter of fiscal 2013, and compared with $3.1 billion for the fourth quarter of fiscal 2012. Cash flows from operations were $12.9 billion for fiscal 2013, compared with $11.5 billion for fiscal 2012.

Cash and cash equivalents and investments were $50.6 billion at the end of the fourth quarter of fiscal 2013, compared with $47.4 billion at the end of the third quarter of fiscal 2013, and compared with $48.7 billion at the end of the fourth quarter of fiscal 2012.

Dividends and Stock Repurchase Program
During the fourth quarter of fiscal 2013:

Cisco paid a cash dividend of $0.17 per common share, or $918 million.

Cisco repurchased approximately 47 million shares of common stock under the stock repurchase program at an average price of $24.80 per share for an aggregate purchase price of $1.2 billion.

During fiscal year 2013:

Cisco paid cash dividends in the aggregate amount of $0.62 per common share, or $3.3 billion.

Cisco repurchased approximately 128 million shares of common stock under the stock repurchase program at an average price of $21.63 per share for an aggregate purchase price of $2.8 billion. As of July 27, 2013, Cisco had repurchased and retired 3.9 billion shares of Cisco common stock at an average price of $20.40 per share for an aggregate purchase price of approximately $78.9 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $3.1 billion with no termination date.

“Our financial strategy is working as our profits grew faster than revenue for the full fiscal year,” stated Frank Calderoni, executive vice president and chief financial officer. “Our fourth quarter also delivered solid financial results as we continued to deliver profitable growth to maximize shareholder value for the long-term.”

Select Global Business Highlights

Cisco completed its acquisition of privately held Ubiquisys Limited, a leading provider of intelligent 3G and long-term evolution (LTE) small-cell technologies designed to provide seamless connectivity across mobile heterogeneous networks for service providers.

Cisco completed its acquisition of privately held JouleX, Inc. a leader in enterprise IT energy management for network-attached and data center assets.

Cisco announced its intent to acquire privately held Composite Software, Inc., a leader in data virtualization software and services.

Cisco announced a definitive agreement to acquire Sourcefire, Inc. a leader in intelligent cybersecurity solutions, with the goal of integrating world-class products, technologies and research teams to provide continuous and pervasive advanced threat protection.
Cisco completed its acquisition of SolveDirect Service Management GmbH, a privately held company headquartered in Vienna, Austria that provides innovative, cloud-delivered services management integration software and services.

At the Microsoft Worldwide Partner Conference, Cisco announced it would team with Microsoft to accelerate the deployment of private and hybrid cloud infrastructure worldwide.
Cisco released an Internet of Everything (IoE) Value Index study predicting that the IoE-the networked connection of people, process, data and things-is expected to enable global private-sector businesses to generate at least $613 billion in global profits in 2013.
Cisco Innovation

Cisco introduced the Carrier Routing System-X (CRS-X), its newest addition to the industry-leading CRS family. The CRS-X is designed to provide unmatched economical scale and lasting investment protection to more than 750 customers worldwide, including global telecommunications service providers and organizations.

Cisco announced that it has opened an innovation center in Israel in collaboration with Pelephone Communications Ltd., an Israeli telecom service provider, to develop and deploy a radio network topology for handling the surge in demand for mobile Internet services.

Cisco announced the evolution of its network services strategy for virtual and cloud networks by integrating the market-leading Citrix® NetScaler® application delivery controller (ADC) technology into the Cisco Unified Fabric Cloud Network Services portfolio.

At Cisco Live! in Orlando, Cisco unveiled a new data center networking architecture designed to usher in the era of Application-Centric Infrastructure by transforming data centers to better address the demands of new and current applications in the cloud era.

Cisco took another significant step in the evolution of its networking portfolio, introducing new and updated Cisco Catalyst® switching and Integrated Services Router products that provide high-performing, fully programmable enterprise networking solutions.
Select Customer Announcements

Cisco announced that it was selected by Vodafone Hutchison Australia (VHA) to accelerate deployment of VHA’s 4G long-term evolution (LTE) network with the Cisco® ASR 5500 as the mobile multimedia core platform.

Cisco announced that Manchester City will be the first Premier League team to offer Cisco Connected Stadium Wi-Fi and StadiumVision™ Mobile solutions.

Cisco announced that Czech telecommunications operator T-Mobile has chosen the Cisco ASR 5000 Series to manage its mobile data traffic from the new LTE network, together with existing 2G and 3G networks.

The Universidad San Sebastián in Chile has updated its voice, data and wireless connectivity using Cisco technology to serve more than 26,000 students and 2,500 teachers.
Cisco announced that TIM Brazil, one of Brazil’s leading service providers, has selected Cisco Videoscape™ Distribution Suite Transparent Caching (VDS-TC) to enable the delivery of video content across multiple screens, protocols, applications and networks.

Cisco announced that Polymetal, a leading precious metals company in Russia and Kazakhstan, has deployed a distributed telephone network based on Cisco Unified Communications.

The University of Virginia Center for Telehealth was selected as the first member of the Cisco Healthcare Center of Excellence program.

The Stock Exchange of Thailand has implemented Cisco’s Data Center architecture to increase operational flexibility and streamline its online trading platform.

By using the Cisco service provider Wi-Fi solution, Hong Kong telecommunications service provider PCCW-HKT became the first service provider in the Greater China region to deploy the next-generation 802.11ac Wi-Fi network.

Cisco announced that Vodafone India, one of India’s leading telecommunications service providers, will be deploying Cisco’s end-to-end networking solutions to evolve to a complete IP-based architecture in India.


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