Cisco's service provider orders down 5 percent year-over-year, but Q3 revenues beat expectations

Cisco reported that while the service provider segment is improving, weak demand for its products drove orders down 5 percent year-over-year in fiscal third-quarter 2014.

Its three main segments--switching, NGN routing, and service provider video--all declined during the quarter. Switching and NGN routing revenues were $3.4 billion and $1.94 billion, while service provider video was $961 million.

One bright spot in the product mix was the ASR 9000 platform, where revenue grew 59 percent year-over-year. Meanwhile, the 6000 and CRS-X also grew above expectations, but Cisco cautioned they are still early in their ramp-up phase.

From a geographic perspective, the company said orders strengthened in the U.S. and European markets during the quarter, led by the commercial and enterprise segments and demand for its high-end routing platforms, data center and security products.

Americas revenue was $4.93 billion, while EMEA and Asia Pacific revenue was $2.5 billion and $1.42 billion.

However compelling its gains were, emerging markets saw a number of challenges, with orders down 7 percent from the previous quarter.

Overall company revenues were $11.5 billion, down 5.5 percent. Fiscal third-quarter profit also fell 12 percent to $2.2 billion, while EPS declined 8.7 percent to 42 cents. After operating cash flow of $3.2 billion in the quarter, Cisco ended April with total cash of $50.5 billion. Cisco said it was pleased with the better-than-expected results.

Looking toward FY Q4 2014, Cisco expects total revenue to decline up to 3 percent or rise up to 1 percent from a year earlier.

Shares of Cisco were listed at $24.35, up $1.54 or 6.77 percent, in Wednesday morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the first quarter of 2014

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