Forecasts 20% fall in annual sales
Network-equipment maker Cisco has reported a 27% decline in net income to $1.5 billion for the second quarter 2009, compared to net profit of $2.06m in the year-ago quarter, on revenue down 7% at $9.08 billion.
It warned that year-over-year sales could fall 20% in the current period and it may cut 2,000 jobs as its customers reduce technology spending.
Operating income during the quarter fell 26% to $1.77 billion, while diluted EPS fell 21% to $0.26. Cash flow from operations was $3.2 billion compared to $2.4 billion in the same period last year. The company repurchased 37 million shares of common stock for $600m.
The company said product revenue fell 11% to $7.34 billion, while services revenue fell 10% to $1.74 billion. During the quarter, the company completed the acquisition of Denver-based presence and messaging software provider Jabber. It also increased its equity stake in VMware to approximately 1.7%.
For the first half, the company reported a 13% decline in net income to $3.7 billion compared to net income of $4.26 billion a year ago, on revenue flat at $19.4 billion.
John Chambers, chairman and chief executive at Cisco, said: We remain comfortable with our long-term vision and strategy as we move into new market adjacencies and prioritize our existing opportunities. We intend to accelerate the alignment of our resources to prioritize future growth opportunities, gradually decrease our operating expenses, while building even stronger customer relationships to position Cisco for ongoing, long-term market leadership.