Cisco Systems revenue and profit both grew significantly in the company's fiscal fourth quarter that ended in July, the company announced on Wednesday.
Sales rose 27 per cent from a year earlier, hitting $10.8 billion for the quarter. For its full fiscal year, the company reported revenue of $40 billion, up 11 per cent from the previous year.
Net income for the quarter was $1.9 billion, or $0.33 per share, up 74 per cent from a year earlier. Not including one-time items, the company earned $0.43 per share, up 39 per cent. This slightly exceeded the consensus forecast by analysts polled by Thomson Financial, who had expected $0.42 per share.
The fiscal year ended July 31 was a period of dramatic expansion for Cisco, which acquired Norwegian business video vendor Tandberg and continued its push into the server business following its Unified Computing System introduction in March 2009.
Cisco's "advanced technologies," such as security and wireless, grew as fast as the company's traditional switching business and faster than the routing category, Chairman and CEO John Chambers said during a conference call to discuss the results. A tougher market in the fourth quarter was networked homes, where Cisco's orders fell by about 10 per cent.
The closely watched Unified Computing System server business, though still a fairly small part of Cisco's operations, grew even more rapidly. The number of customers grew about 90 per cent to exceed 1,700, Chambers said. Cisco is likely to announce some key sales in that division over the next year, in accounts where Cisco would not be expected to win, Chambers said.
Cisco expects its revenue to grow between 18 per cent and 20 per cent in the current quarter, exceeding the company's long-term target despite what Chambers called "unusual uncertainty" in the global economy.
"We are seeing a large number of mixed signals," he said. "The economy continues to be the wild card in people's minds." As a result, Cisco is approaching the coming quarters with caution, he said. The company's long-term forecast has been for revenue growth between 12 per cent and 17 per cent per quarter.
However, the company again said it plans to add about 3,000 employees over the next several quarters, after it made a similar forecast early in this calendar year and hired more than 3,000 over the past two quarters. Many of those new hires will be in new businesses, with sales staff hitting the ground before some other employee categories, executives said.
Cisco added 2,100 employees in the quarter just ended, not counting those who joined the company through the Tandberg acquisition, Chambers said. Of those 2,100, about 70 per cent were hired in the U.S. and roughly 600 in the company's home state of California.
Sales growth was strong throughout most areas of the world and product categories, Chambers said. The increase was strongest in emerging markets, with India a standout at more than 50 per cent growth. Orders in both China and the U.S. grew about 20 per cent.
In after-hours trading late Wednesday, Cisco shares on the Nasdaq were down $1.85 at $21.88.
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