Cisco turns its fortunes round
It appears that things are finally starting to turn around for the IT industry, after the industry bellwether Cisco published some decent results for once.
Analysts tend to look to Cisco to decide the pattern for the rest of the industry. This is because it tends to get big government and corporate contracts, and if it does well, then the chances are the bigger contracts are buying.
Cisco posted a higher than expected quarterly profit and said current-quarter revenue could increase
In a statement, chief executive John Chambers said the company was seeing some good signs in the United States and that other parts of the world are "encouraging", and he is predicting a continued slow steady recovery on a global basis.
Chambers said that with cloud, mobility and video all coming together, talk about the Internet of Everything and unprecedented new opportunities for businesses and consumers. Cisco is excited about the future.
He predicted that revenue will grow in a range of four to seven percent from a year ago. If this is the case it should be making about $12.16 billion to $12.5 billion.
"Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the US and other parts of the world which are encouraging," Chambers said.
The results might show that Cisco is not the industry bellwether that analysts claim. In fact some of its rivals have already predicted much lower forecasts for the current quarter.
Chambers said revenue from the US federal government was down three percent in the quarter due to spending cutbacks, but this was offset by increased state and local government spending which boosted overall US public sector revenue by five percent. It is odd that Juniper and IBM didn't notice this.
Cisco reported that its profit for the third quarter grew to $2.5 billion from $2.17 billion a year ago. Revenue rose more than five percent to $12.2 billion from $11.6 billion .
Cisco forecast fourth-quarter gross margins of 61 to 62 percent which were not all that gross really.