Cisco revenue grows 8% despite China-US tensions

Enterprise networking company Cisco reported 8 percent increase in revenue to $13.1 billion in the first quarter of fiscal 2019.
Cisco Live Berlin 2016The revenue growth was supported by 9 percent increase in product revenue and 3 percent increase in service revenue.

Cisco’s revenue rose 5 percent in Americas, 11 percent in EMEA, and 12 percent in APJC including India and China.

Cisco CEO Charles Robbins said that the networking company was impacted by the Donald Trump administration’s 10 percent tariffs on imports from China in the first quarter.

“We implemented some price increases, as we said we would, and frankly, we didn’t see any difference in the momentum before we did that and the momentum we saw after that in the quarter,” Robbins told CNBC. “Obviously, we would prefer that the tariffs don’t get increased to 25 percent in January.”

Cisco has reported 18 percent increase in Applications software business revenue to $1.42 billion, 11 percent growth in Security business to $651 million and 9 percent rise in Infrastructure Platforms to $7.64 billion.

Subscriptions, which provide a more steady revenue flow, accounted for 57 percent of total software revenue in the first quarter, the company said. The preceding quarter’s share was 56 percent.

Cisco closed the acquisition of Duo Security, a provider of unified access security and multi-factor authentication and July Systems, a provider of location platform through cloud-based subscription offerings, in the first quarter of fiscal 2019.

Deals such as the $2.35 billion purchase of cyber security provider Duo Security in August have played an important part in driving growth in Cisco’s newer business.

Acquisitions provided an 80-basis-point boost to the company’s first-quarter results compared with a year ago, Chief Financial Officer Kelly Kramer said on a post-earnings call with analysts.

Cisco pivoted to software and cyber security to cushion the impact from slowing demand for its routers and switches from companies increasingly shifting to cloud services offered by, Microsoft and Alphabet instead of building their own networks, Reuters reported.

The US-based company said it expects second-quarter revenue growth of between 5 percent and 7 percent to between $12.48 billion and $12.72 billion.

Baburajan K

Related News

Latest News

Latest News