Cisco Q3 revenue slips 5.5%, income dips 12%, forecasts gloomy Q4

Cisco Systems CEO John Chambers, who is committed to its current strategies, said fourth quarter revenue will decline, after reporting 5.5 percent slip in Q3 revenue to $11.5 billion and 12 percent dip in net income to $2.2 billion.

The networking vendor’s India revenue decreased 1 percent. Cisco revenue in Brazil dipped 27 percent, Russia declined 28 percent, China slipped 8 percent and Mexico declined 3 percent. This indicated that Indian performance was one of the best comparing with other emerging IT markets in the world.

Cisco Systems noted that it faces challenging business situations in emerging markets. Cisco’s orders in emerging markets declined 7 percent with the BRICs plus Mexico down 13 percent.

The company is seeing better momentum in the domestic market. Cisco said product orders shot up 7 percent with U.S. commercial and U.S. enterprise both up over 10 percent. Europe is also reviving with orders in the UK rose 7 percent, Germany increased 5 percent, and northern Europe as a whole grew 4 percent.

ACI enabled platforms, specifically the Nexus 9000, grew from 20 plus customers last quarter to 175 customers this quarter with a pipeline approaching 1,000 customers.

Data Center revenue grew 29 percent. Security revenue increased 10 percent and orders increased 20 percent.

Collaboration comprising WebEx and TelePresenc revenues dipped 12 percent in Q3, collaboration orders increased 4 percent. WebEx revenue grew 7 percent. The number of billable users rose over 26 percent. Meraki cloud networking business grew over 150 percent, with the customer count growing approximately 30 percent sequentially, said Cisco.

Cisco Q3 revenue chart

Wireless revenues grew 3 percent.

Service provider revenue slipped 5 percent primarily because of the weakness in emerging markets, said Cisco.

SP Video revenue declined 26 percent. “We are seeing some signs of stabilization in the SP business but believe it will take multiple quarters to return to growth. We will continue to make changes we need to, to lead in the service provider market,” said Cisco CEO John Chambers.

Next generation network routing revenue dipped 10 percent.

Te ASR 9000 revenue rose 59 percent. The company said it is Cisco’s fastest growing and most successful high-end router since the 7500 introduced over a decade ago.

Overall switching revenue declined 6 percent.

Cisco said it expects Q4 revenue to decline by 1-3 percent.

The company’s headcount decreased by approximately 230 from last quarter to 73,834.

Baburajan K
[email protected]

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