Chairman and CEO John Chambers crowed that the company hit the upper ends of its guidance or better on almost every metric and generated $4 billion in cash flow. "My confidence in our ability to be the #1 IT Company is increasing," he said in the earnings release.
Cisco earned 52 cents per share, a penny better than consensus, with net income of $2.8 billion. Including a charge for settling patent litigation with
Revenue was up 6% from the prior year in the May-July period, coming in at $12.4 billion, in line with estimates. Gross margin may have been one catalyst for the stock's softness after the results, falling to 59.2% from 60.6% a year earlier. The company noted that adjusted gross margin was 62.1%.
Cisco paid $918 million in cash dividends, 17 cents per share, during its fiscal fourth quarter, and repurchased $1.2 billion worth of stock, or 47 million shares at an average of $24.80 each.
For the full year Cisco earned $2.02 per share ($1.86 on a GAAP basis) on $48.6 billion in revenue.
The stock stumbled in after-hours trading, but things got worse during the company's conference call, on which Chambers said the "mixed and inconsistent" economic recovery is on a trajectory he does not see changing.
Cisco's guidance called for fiscal Q1 revenue growth of 3-5%, implying a range of $12.2 to $12.5 billion, compared with a consensus call closer to the upper end of that range at $12.45 billion. Earnings are expected at 50-51 cents, while Wall Street expects 51 cents. The company also says it will lay off around 5% of its workforce, cutting about 4,000 jobs and taking a charge of $250-$300 million.
Up more than 34% this year through Wedensday's close, Cisco shares dropped 10.1% at $23.71 after hours.