Enterprise networking supplier Cisco said its revenue rose in all segments barring service provider video business in the fourth quarter.
Cisco revenue rose 3.9 percent to $12.8 billion in the fourth quarter ended July 25, 2015, while net income increased 3.2 percent to $2.3 billion. Cisco in the full fiscal year posted revenue of $49.2 billion with a growth of 4.3 percent, while net income increased 14.4 percent to $9 billion.
“The strong growth of deferred revenue shows we are very effectively driving our business to a more predictable software-based business model, at the same time as growing revenues and earnings,” said Chuck Robbins, Cisco chief executive officer.
Product revenue and service revenue each increased 4 percent.
Cisco achieved fourth quarter revenue growth of 14 percent in collaboration to $1,088 million, 14 percent in data center to $880 million, 2 percent in switching to $3,719 million, 3 percent in NGN routing to $1,992 million, 4 percent in security to $464 million and 7 percent in wireless to $715 million.
Service Provider Video revenue of Cisco dropped 7 percent to $994 million.
Revenue from Americas increased 7 percent, while both EMEA and APJC were flat. Cisco does not share revenue from India and China. This is the final quarter for Cisco under the aegis of John Chambers who stepped down as CEO after working for nearly two decades.
Frost & Sullivan Emerging Telecoms Director Ronald Gruia said: “Weaker enterprise spending trends could negatively impact the company, however for the current FQ, the commercial and public sector should see a positive bounce. We note that public sector earnings increased 7 percent in Q3, after experiencing the same 7 percent growth in Q2.”
There will be more turbulence in service provider and emerging markets segments, representing 40 percent bookings. In spite of that, the recent results of competitors such as Juniper and Alcatel-Lucent, the service provider business (including areas such as carrier routing) could see a temporary improvement.
Frost & Sullivan said data center revenues could fall below consensus after some softness in Q2 and there could be further divestitures, after the sale of the Connected Devices Division to Technicolor announced in late July.
There will be quite a few questions to CEO Chuck Robbins regarding the new strategic priorities as the company navigates through major communications industry architectural shifts such as SDN and NFV.
Renewed focus areas could include security, Open DNS, data center, mobility and Application Centric Infrastructure (ACI). The campus portfolio can also become revitalized with the ongoing 802.11c upgrade cycle.