Cisco Q1: profit drops, but Chambers is confident of recovery

On the surface, Cisco's Q1 earnings leave a lot to be desired. The company reported that its first quarter sales of $9.0 billion were a 13 percent year over year decline. Company GAAP net income was also down to $1.8 billion, a 19 percent year over year decline.

While any declines in revenue or profit is never a good thing, they weren't as bad as the 15 to 17 percent declines Cisco predicted for Q1 09 back in August. Despite the initial gloomy outlook, Cisco's CEO John Chambers seemed unfazed--arguing that the results do not raise any red flags. "Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times." 

Chambers added that he is starting to see cracks in the economic freeze in the business and telecom markets.  

Two areas of potential growth that Cisco continues to chase are telepresence and consumer video via its impending acquisition of TANDBERG and DVN's Set Top Box division.

For more:
- read the Cisco release
- see this video of Cisco CEO John Chambers discussing the report

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