Although Cisco Systems‘ earnings and revenue GREW in the latest quarter, CEO John Chambers called the global economy “challenging and inconsistent,” and Cisco announced that it is cutting around 4,000 jobs, about 5% of its workforce. What’s going on? Cisco didn’t “beat The Street” (Wall Street analysts’ expectations).
Sure, I saw the same kind of “revolving layoffs” when I worked at Sun Microsystems, before I left THEM. I don’t know about Cisco, but at Sun, the people doing the “cutting” were the people who needed to go! Eventually, many of them did, and Sun was acquired by Oracle. Everyone in Silicon Valley knew what Sun’s problem was, except Sun management. Guess why.
The company’s stock fell $2.51, or 9.5 percent, to $23.87 in extended trading after the results were released. The stock closed up 6 cents at $26.38 in the day’s regular trading session.
Cisco Systems Inc. earned $2.27 billion, or 42 cents per share, in the three months that ended on July 27. That’s up from $1.92 billion, or 36 cents per share, a year earlier.
Adjusted earnings were 52 cents per share in the latest quarter, squeaking past Wall Street’s expectations by a penny. This figure excludes charges stemming from a patent settlement with TiVo and other one-time items.
Revenue rose 6 percent to $12.42 billion from $11.69 billion.
Analysts, on average, had expected revenue of $12.41 billion, according to a poll by FactSet.
Cisco’s product orders grew 4 percent year-over-year, the same as in the third quarter of this year. Orders in the Americas region grew 5 percent, while Asia declined 3 percent due to economic challenges in the region, Chambers said. Europe, the Middle East, Africa and Russia increased 6 percent. On its own, Europe was up 9 percent.
Cisco offered analysts the guidance that, for the current quarter, it expects revenue to grow 3-5% year-over-year. Analysts are expecting $12.72 billion, a 7% increase from the $11.9 billion last year. SFGate.com says:
Over the long term, Chambers said that the company still expects revenue to grow 5 percent to 7 percent, and added that Cisco is in a “better position in the market today than ever before.”
Tell that to the 4,000 workers who will lose their jobs because their “success” wasn’t “successful” enough….
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