Cisco announced 2017Q4 results with sales of $12.1B, but representing a 4% YoY decline. Adjusted earnings fell 3% from one year ago to 61 cents per share, which matched analysts’ estimates. You used to be able to bank on Cisco beating earnings by at least a penny a share. Overall, the results underwhelm.
Chuck Robbins, CEO, was upbeat, “We had another strong quarter and a transformative year. We made tremendous progress transitioning our business to more software and recurring revenue and delivered on our commitment to accelerate innovation in our core and across the portfolio.”
Cisco did not break out their Service Provider revenues separately. They did break it out to show:
- Wireless and Security which increased 5% and 3%, respectively
- NGN Routing and Switching revenue each decreased 9%.
- Service Provider Video, Data Center, and Collaboration revenue decreased 10%, 4%, and 3%, respectively
Overall, the picture on the forecast continues lower. They are expecting 2018Q1 overall revenue to be down 1 to 3% compared to the year earlier period. Shares were down 2.5% in the after hours.
Well, Cisco is facing a tough market environment. They continue the trend reported earlier http://www.truepulse.com/telecom-industry-downturn/ with Huawei, Nokia and Ericsson showing slowing sales. It’s not a disaster, but telecommunication equipment will not be a growth story for the upcoming year. At best, they will underwhelm.
It will not be easy for equipment brokers of secondary market telecom gear either!
To view the Cisco announcement, see https://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1873317