Cisco revenues down, but analysts predict upturn

7 February 2002 Revenues at networking hardware giant Cisco Systems fell sharply in its second quarter of fiscal 2002, compared to the same period a year earlier. However, signs are emerging that Cisco could be emerging from its year-long slump.

For its latest quarter, the company posted revenues of $4.8 billion (€5.54bn), a 29% drop on the $6.7 billion (€7.74bn) achieved in the same period in the previous fiscal year. But sequentially its revenues were up 8% compared to the first quarter of fiscal 2002.

Its net income figures of $660 million (€762m) were also down by half year-on-year, but this compares favourably to many of its rivals.

In addition, while many other vendors are haemorrhaging cash, Cisco generated more than $2 billion (€2.3bn) during its 2002 first quarter. On the back of a drive to reduce its inventories, Cisco said it expects to generate an additional $1 billion (€1.15bn) in cash during its third quarter.

Since 2000, Cisco has been investing heavily in the Internet protocol (IP) telephony market, although it is best known as a supplier of routers, hubs and switches for telecoms and enterprise networks. The company has established itself as the leader in the voice over IP (VoIP) market and to date has shipped more than 500,000 IP phones and around 6 million VoIP ports.

Despite the encouraging signs, Cisco CEO John Chambers said that business conditions remained “challenging” and he predicted that revenue growth would be less than 5% during the third-quarter.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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