Cisco's Q2 revenue declines 8 percent, but sees bright spots in security, data centers
Cisco (Nasdaq: CSCO) reported that its fiscal second-quarter revenue dropped 7.8 percent year-over-year to $11.2 billion due to a drop in sales in all of its geographic regions and product groups.
The America's region revenues dropped 5 percent, while EMEA dropped 2 percent. However, across customer segments, the vendor said it saw a 1 percent increase in orders from the commercial and public sectors, but the service provider market contracted by 12 percent, and enterprise was 2 percent lower.
Company net profit also declined to $1.4 billion, or 27 cents per share, from $3.1 billion, or 59 cents per share, in the same period a year ago.
The vendor's profits were impacted by a one-time $655 million charge to resolve issues with memory components in its older products and $926 million tax benefits from a settlement with the IRS and R&D credits in the United States.
Two areas of growth for Cisco were data center and security, which rose 4 and 17 percent to $511 million and $393 million, respectively.
One area of concern is its fiscal third-quarter guidance. Cisco forecast revenue of between $11.2 billion and $11.5 billion; analysts' average forecast is $11.3 billion.
Shares of Cisco were trading at $21.91, down 94 cents, or 4.11 percent, in late Thursday morning trading on the Nasdaq stock exchange.
- see the earnings release
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