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.

For more:
- see the earnings release

Earnings summary: Wireline telecom earnings in the fourth quarter of 2013

Related articles
Dell'Oro: Alcatel-Lucent, Cisco, Juniper edge routers to benefit from wireless backhaul growth
Cisco, Ontario government ignite high tech job creation
Cisco lowers its revenue, earnings estimates

Suggested Articles

IBM has named internship and mentor program Outreachy as the winner of its second $50,000 Open Source Community Grant.

While carriers have kept up with the networking demands related to the COVID-19 pandemic, Vodafone is upgrading its network by 4 TBps of capacity.

According to revised research by International Data Corporation (IDC), worldwide IT spending is now expected to decline by 2.7%.