Cisco Systems, Inc. Earnings Cheat Sheet: Margins Shrink For Fifth Straight Quarter as Profit Falls

S&P 500 (NYSE:SPY) component Cisco Systems, Inc. (NASDAQ:CSCO) reported its results for the fourth quarter. Cisco Systems, Inc. is a multinational corporation engaged in the design, manufacturing and sales of Internet Protocol-based consumer electronics, networking, and other services related to communications and information technology.

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Cisco Systems Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Cisco Systems, Inc. fell to $1.23 billion (22 cents per share) vs. $1.94 billion (33 cents per share) a year earlier. This is a decline of 36.3% from the year earlier quarter.

Revenue: Rose 3.3% to $11.2 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CSCO reported adjusted net income of 40 cents per share. By that measure, the company beat the mean estimate of 32 cents per share. It beat the average revenue estimate of $10.97 billion.

Quoting Management: “We’ve made significant progress on our comprehensive action plan to position ourselves for our next stage of growth and profitability, while delivering solid financial results in Q4,” said John Chambers, chairman and CEO, Cisco. “As we start our next fiscal year, you will see a very focused, agile, lean and aggressive company, that is laser focused on helping our customers use intelligent networks to transform their businesses.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.4 percentage points to 61.3% from the year earlier quarter. Over that time, margins have contracted on average 2.4 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the third quarter, by one cent in the second quarter, and by 2 cents in the first quarter.

Revenue has risen the past four quarters. Revenue increased 4.8% to $10.87 billion in the third quarter. The figure rose 6% in the second quarter from the year earlier and climbed 19.2% in the first quarter from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the third quarter, net income fell 17.6% from the year earlier, while the figure fell 17.9% in the second quarter.

Competitors to Watch: Hewlett-Packard Company (NYSE:HPQ), Juniper Networks, Inc. (NYSE:JNPR), Alcatel-Lucent (NYSE:ALU), Microsoft Corporation (NASDAQ:MSFT), Intl. Business Machines Corp. (NYSE:IBM), Extreme Networks, Inc (NASDAQ:EXTR), Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), Motorola Mobility Hldgs. Inc (NYSE:MMI), NetGear, Inc. (NASDAQ:NTGR), and ADTRAN, Inc. (NASDAQ:ADTN).

Investing Insights: Steve Jobs Prepares to Deliver a New Catalyst for Apple’s Stock.

(Source: Xignite Financials)