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Cisco beats forecasts on strong Asian demand

updated 08:06 pm EDT, Thu August 16, 2012

European orders falling, will continue to fall

Cisco announced results for the most recent quarter last night, with the computer networking equipment company revealing earnings that slightly outperformed analysts expectations. As The New York Times reports, the router maker is cautiously optimistic regarding its future but maintains that it is too early to call the most recent results a trend. The European market, in particular, represents something of a challenge for Cisco going forward.

Cisco posted $11.7 billion in revenue for the quarter, up four percent from the year-earlier quarter. On that $11.7 billion, the company posted $2.5 billion in operating profit, or 47 cents a share. Wall Street analysts on average had expected the company to do about $11.6 billion in revenue for the quarter.

Cisco cited strong demand for its products and services in Asia, especially in China. The company also saw improvement in the US market, with an uptick in business toward the latter part of the quarter. The European market, though, with its continuing economic troubles, saw demand for Cisco products slump. The company expects that the ongoing debt crisis will cause European orders to continue to fall in the near future.

To ensure the positive returns continue, Cisco is continuing on the cost-cutting plan to which it has been adhering for some time now. That plan depends on both significant job cuts and a refocusing of the company's efforts.

Earlier this year, Cisco killed off its underperforming, enterprise-targeted Cius tablet, and the company has since narrowed its focus to routing, switching and services, collaboration, data center virtualization/cloud, video, and business process architectures. As a part of that narrowing of focus, the company recently purchased Virtuata, a virtual machine security company.

by MacNN Staff



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