CSCO pro forma $0.51 meets expectations, but stock is down in after hours trading.
Cisco Systems Reports Second Quarter Earnings
SAN JOSE, Calif.--(BUSINESS WIRE)--
Cisco Systems Inc., the worldwide leader in networking for the
Internet, today reported its second quarter results for the period
ending Jan. 25, 1997.
Net sales for the second quarter were $1,592.4 million,
compared with $918.5 million for the same period last year, an
increase of 73%. Net income was $338.5 million or $0.49 per
share, compared with $209.7 million or $0.31 per share for the
second quarter of 1996.
On Nov. 19, 1996, Cisco completed its purchase of NETSYS
Technologies Inc., a pioneer in network infrastructure management
and performance analysis software, in exchange for common stock
worth approximately $79 million and took a one-time charge of
$43.2 million or $0.06 per share on an after-tax basis as a write-off
of in-process R&D. Additionally, the company realized a pretax
gain of $47.3 million from the sale of a portion of one minority
stock investment that, on an after-tax basis, contributed $0.04
per share to net income for the quarter.
Pro forma net income, excluding the write-off of NETSYS
in-process R&D and the gain from the sale of the above-mentioned
stock was $351.9 million or $0.51 per share, compared with $209.7
million or $0.31 per share in the same period last year, increases
of 68% and 65% respectively.
Net sales for the first six months of fiscal 1997 were $3,027.2
million, compared with $1,716.8 million for the same period last
year, an increase of 76%. Net income was $519.4 million or $0.76
per share, versus $391.1 million or $0.59 per share during the
first six months of fiscal 1996.
Pro forma net income for the first six months was $672.7
million or $0.98 per share, excluding write-offs of in-process
R&D from the NETSYS and Telebit acquisitions and the gains from
sales of the minority stock investment, versus net income of
$391.1 million or $0.59 per share for the same period last year,
increases of 72% and 66% respectively.
The net income per share and number of shares used in per-share
calculations for all periods presented reflect the two-for-one
stock split that was effective Feb. 16, 1996.
"We are pleased to report the eleventh consecutive quarter
of double-digit revenue growth for Cisco," said John Chambers,
president and CEO of Cisco Systems.
Cisco continued to make progress in its three key markets
-- Enterprise, Service Provider and Small-to-Medium Business
-- by providing end-to-end network systems through internal product
developments, strategic alliances, minority investments and
acquisitions.
In the enterprise, Cisco continued to be selected as a strategic
network provider by leading customers such as USAA and Canadian-based
Toronto Dominion Bank, who want end-to-end networking solutions
from a single source.
Leading-edge customers are increasingly seeking both
comprehensive end-to-end networking systems and computing systems
from one or two strategic suppliers. To address this requirement,
Cisco and Hewlett-Packard announced a unique worldwide business
alliance. The two companies will offer integrated end-to-end
network-computing solutions with a one-stop approach to service
and support for customers.
For enterprise customers who continue to use the mainframe
as a powerful server, Cisco made minority investments in Interlink
and OpenConnect. Both companies offer technologies that help
integrate SNA systems more tightly with open, standards-based
networks.
For small-to-medium businesses, Cisco complimented its NetBeyond
family with the Cisco 770 series of access products that address
the needs of Small Office/Home Office (SOHO) users. This new
series of products delivers simple, secure intranet and Internet
access to a growing number of SOHO customers.
In the wide area networking arena, Cisco's Tag Switching,
Frame Relay and ATM technologies are being met with increasing
acceptance by service providers. Additionally, to help scale
the Internet, Cisco introduced a variety of enhancements and
new systems for its high-end core routers that will improve
performance and increase port density while reducing cost.
"During the past several quarters, we have seen leading
enterprise customers move to reduce network complexity by aligning
with Cisco as their strategic vendor for network systems. This
trend is now beginning to emerge in the service provider area
with a number of customers choosing Cisco for their end-to-end
network system requirements," said Chambers.
Cisco Systems Inc. (NASDAQ:CSCO) is the worldwide leader
in networking for the Internet. News and information are available
at cisco.com . |
