Cisco Systems, Inc. reported its second quarter results after the market closed on Wednesday. They beat analyst expectations with sales of $11.6 billion sale ($50 million better).  This was a drop from $11.8B in the year ago period.  They also beat on the bottom line with net income of $2.35 billion, or 47 cents per share.  This was still a drop from $3.15 billion, or 62 cents per share, a year earlier.

The best growth came in the security business, which offers firewall protection and breach detection systems, where revenue rose 14 percent to $528 million.

“We are pleased with the quarter and the continued customer momentum as we help them drive security, automation and intelligence across the network and into the cloud,” said CEO Chuck Robbins.

“This quarter we announced our intent to acquire AppDynamics which, combined with Cisco’s networking analytics, will provide customers with unprecedented insights into business performance. We will remain focused on accelerating innovation across our portfolio as we continue to deliver value to customers and shareholders.”

Both revenue and earnings are being guided down for Q3.  Clearly, competition from Juniper and Huawei, slower hardware infrastructure spending, and the high US dollar are combining to make for a more challenging future.  The key success factor at Cisco has shifted from innovation to cost control.

For more details, see http://s2.q4cdn.com/230918913/files/doc_financials/quarterly/Q2Y17/V3_Cisco-Reports-Second-Quarter-Earnings.pdf