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Cisco kicks off Robbins' reign by beating the street

Chambers dances out the door of an embiggened Borg

Cisco's new CEO Chuck Robbins has had the pleasure of reporting ahead-of-expectation results for Q4 of 2014/15.

In the quarter that saw Robbins take over the big office from the seemingly-eternal John Chambers, Cisco reported year-on-year growth for the quarter of 3.9 per cent (US$12.8 billion).

Full-year 2015 revenue was also up by four per cent on the previous year, to $49.2 billion. Q4 net income, at $3 billion, was up 6.2 per cent on the same quarter last year.

However, the company's margins continue to be under pressure. Overall margin of 62.1 per cent was 0.4 per cent down on the same quarter last year. USA margins only dropped by 0.2 per cent, but Europe dropped 0.4 per cent (from 62.5 per cent to 62.1 per cent), while the Asia-Pac fell by 0.7 per cent (61.2 per cent to 59.5 per cent).

Robbins attributed the fall to both pricing pressure and a change in product mix. The price war seems to have been most intense in APAC – which includes the challenging Chinese market – rewarded by revenue growth from $1.766 billion to $1.932 billion.

The Americas rose a pleasing $7.252 billion to $7.801 billion, while EMEA slipped slightly from $3.119 billion to $3.110 billion.

The product segment highlights are in collaboration (up 14 per cent year-on-year for the quarter to clear the billion mark), data centre kit (also up 14 per cent, to $880 million) and wireless (up 7 per cent to $715 million).

Security managed a mere four per cent climb from its relatively small base ($464 million), and the core switching business was up by just two per cent ($3.719 billion). The service provider video segment slipped by seven per cent to $994 million, perhaps explaining why Cisco's no longer keen on things like set-top boxes.

The company expects Q1 of FY2016 to deliver between two per cent and four per cent growth over Q1 FY2015. ®

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