Cisco Systems reported fiscal first quarter earnings that showed a 5 percent increase in net income to $2.5 billion and an 8.1 percent increase in revenue to about $10.3 billion. While Cisco CEO John Chambers was bullish about the company's chances to keep its long-term growth rate plans in line, he also said the company is cutting $1 billion worth of costs related to marketing, travel, events and other areas. The company also has initiated a hiring freeze.
Those cuts come as Cisco experienced a sharp decline in product orders in the last part of the recent quarter. Chambers also said revenue for the second quarter could decline by between 5 percent and 10 percent.
Ironically, the marketing cuts come as Cisco is in the midst of a big marketing and advertising push for a new product announcement due next Tuesday. That announcement reportedly involves a new service provider edge router, and with Cisco's orders trending downward and widespread industry concern about near-term carrier capex, you have to wonder if the company may have its work cut out for it as it looks for buyers of the new product.
- Network World has the story
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