Cisco today reported sales of $8.2 billion for the third quarter of fiscal 2009, down 17 percent from the same period a year ago. Net income fell to $1.3 billion, down 24 percent from $1.8 billion a year ago. But the company also managed to boost its cash war chest by $2 billion to $33.5 billion, which means it has plenty of capital to put toward acquisitions.
It took only a few minutes into the call for Cisco Chairman and CEO John Chambers to get to the next big growth drivers for the network equipment company — video and collaboration. During its third quarter, Cisco said it would buy Pure Digital, the maker of the Flip handheld camcorder, as part of its strategy to provide a means for people to upload more video and to provide an end-to-end video experience. Chambers used this as an example of what he called “the next generation of the Internet.”
Chambers, who discussed combining video with collaboration, touched on Cisco’s ability to grow its telepresence orders by 70 percent and sales by 130 percent by adding 45 new customers during the quarter. Touting its own success with telepresence, Chambers said the company has cut its travel budget from $750 million a year to $350 million a year (though during these tough times, it’s temporarily cut to $240 million annually). However, the company is still very much a switch and router company as its revenue breakdown illustrates. Even during a grim economic time, almost half its sales still come from such hardware.
Chambers said Cisco customers are seeing some stabilization in their current business, but they still expect disappointing year-over-year growth. Cisco expects its revenue to decrease by 17 percent to 20 percent year over year for the fourth quarter.