Cisco Systems CEO Chuck Robbins had a tough time in improving market conditions for its network products for enterprises.
Cisco, the largest networking company based in the US, has reported quarterly revenue of $12.1 billion (–4 percent) and net income of $2.4 billion (–14 percent) in the fourth quarter of fiscal 2017. The company could not improve revenue and profit despite a series of acquisitions.
“We made tremendous progress transitioning our business to more software and recurring revenue and delivered on our commitment to accelerate innovation in our core and across the portfolio,” said Chuck Robbins, CEO of Cisco.
TBR in an analyst note said that the latest results underscore the challenges Cisco Systems’ faces as it seeks to evolve its legacy routing and switching businesses toward an intent-based networking model. While the portfolio evolution is ongoing, investments in innovative networking solutions are resonating with clients.
Michael Soper, analyst at Technology Business Review, said Cisco closed fiscal 2017 down, however the company will pare losses in 2018 as clients accelerate reinvestments in core product portfolio areas.
Cisco revenue dipped 6 percent in Americas, down 6 percent in EMEA, and rose 6 percent in Asia Pacific China. Cisco did not reveal India specific revenue.
Cisco achieved 5 percent revenue growth from wireless business to $799 million, while Security revenue increased 3 percent to $558 million.
NGN Routing revenue dipped 9 percent to $1.893 billion. Cisco’s Switching revenue decreased 9 percent to $3.439 billion.
Cisco revenue from Service Provider Video fell 10 percent to $227 million, Data Center revenue dipped 4 percent to $837 million, and Collaboration revenue decreased 3 percent to $1.113 billion.
“The network has never been more critical to business success and we are building the network of the future,” Chuck Robbins said.
Cisco CEO presented a gloomy outlook for the next quarter saying the revenue will further dip by 1-3 percent.
Cisco achieved gross margin of 62.2 percent and product gross margin of 60.3 percent in the fourth quarter. The decrease in the product gross margin compared with 62.2 percent in the fourth quarter of fiscal 2016 was primarily due to pricing, partially offset by productivity improvements and to a lesser extent product mix.
Cisco’s operating expenses fell by 3 percent to $4.5 billion.
Cisco closed the acquisition of MindMeld, Inc. and the acquisition of analytics team and associated intellectual property developed by Saggezza.
Cisco will also acquire Viptela, a provider of software-defined wide area networking products, and Observable Networks that offers cloud-native network forensics security applications delivered as a service in the first quarter of fiscal 2018.
