Cisco profits leap to $2.4bn with data centre and switching boost

Cisco profits rise after strong performances from key divisions

Cisco has posted revenues of $12.7bn for its first financial quarter of 2016, a rise of 3.6 percent compared to the same quarter a year ago.

The uptick in sales helped Cisco to post profits of $2.4bn for the quarter, up an impressive 33 percent on the $1.8bn it made 12 months ago.

The growth in revenues and profit were driven by a strong 24 percent increase in its data centre division sales to $859m, while sales in its Collaboration unit also rose, up 17 percent to $1.1bn.

For example, its WebEx online meeting tool saw revenues rise 23 percent in the quarter, underlining the ongoing trend for cloud-based tools.

However, Cisco’s Switching unit remains the firm’s biggest cash cow, with sales rising five percent to reach $4bn.

One area that didn’t perform so well, though, was its Next-Generation Network (NGN) division, which saw revenues fall by eight percent to $1.8bn.

Newly installed Cisco CEO Chuck Robbins was upbeat about the results, however, claiming it was a very strong quarter for the company.

“We are accelerating our ability to deliver on growth opportunities, aggressively driving our cloud business, and delivering continued strength in our deferred product revenue, as we sell more of our portfolio in software and cloud models,” he said.

“As I look at the big picture, I’m extremely pleased with the speed with which our teams are executing. We have a clear strategy and are confident that we are making the right transitions in our business, investing where we need to for future growth, profitability, and market leadership.”

Robbins also touted Cisco’s partnership with Apple as another example of the company focusing on new business opportunities through partnerships with key players in the tech industry.

“Partners like Apple, Inspur, and Ericsson see Cisco as the market leader they want to work with to move faster and drive greater value to customers and the market. I believe we will see several points of growth from these partnerships over the next few years.”

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13 November 2015 | 11:49 am – Source: v3.co.uk

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