Cisco’s Third Quarter: Busy and Profitable?

Networking vendor Cisco Systems (NASDAQ: CSCO) is set to report third-quarter fiscal 2010 revenues today that could show a continued recovery in global networking spending.

Cisco’s second quarter was a positive one, with net revenues of $9.8 billion, which was an 8 percent year-over-year increase. The goal for third quarter is even more optimistic. During Cisco’s second-quarter investor call, CEO John Chambers provided revenue guidance for its second fiscal quarter of an increase in the range of 23 to 26 percent compared to the same quarter in 2009.

Wall Street analysts predict earnings of $0.39 per share on revenues of $10.2 billion according to Thomson Reuters — an upswing from the $8.2 billion reported last year.

Overall, it was a busy quarter for Cisco, with new carrier, enterprise, small business and collaboration developments. On the carrier front, Cisco announced its next-generation Carrier Routing System the CRS-3. The CRS-3 will deliver up to 322 terabits per second of throughput and replaces Cisco’s previous high-end CRS-1 router, which provides up to 92 terabits per second of capacity.

For enterprises, Cisco updated its Unified Computing System (UCS) with the next-generation Intel Westmere processor family, providing increased performance. The continued push by Cisco into the server space also continued to realign the competitive landscape: During the quarter, Cisco severed its longstanding Certified Channel Partnership with HP as the two vendors have now increasingly become rivals in both servers and networking gear. For its part, HP acquired rival networking vendor 3Com, further expanding HP’s own networking portfolio to challenge Cisco.

Cisco also continued its push into the small business space with its new Cisco 100 series of entry-level routers. The Cisco wireless portfolio was also expanded for consumers with the new Valet router class, which aims to provide easier setup and manageability.

On the collaboration front, Cisco finally wrapped up its acquisition of video conferencing vendor Tandberg. Cisco first bid on Tandberg in October 2009 and then went through five months of challenges in which the price of the acquisition grew by over $300 million from an initial $3 billion bid to a closing cost of approximately $3.3 billion.

Sean Michael Kerner is a senior editor at, the news service of, the networkfor technology professionals.

Latest Articles

Follow Us On Social Media

Explore More