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CISCO SYSTEMS REPORTS FIRST QUARTER EARNINGS
SAN JOSE, California - November 4, 1997 - Cisco Systems, Inc., the
worldwide leader in networking for the Internet, today reported its
first quarter results for the period ending October 25, 1997.
Net sales for the first quarter were $1,869 million, compared with
$1,435 million for the same period last year, an increase of 30%. Pro
forma net income, which excludes the write-off of purchased in-process R&D
discussed below, was $416 million or $0.59 per share, compared with pro
forma net income of $321 million or $0.47 per share for the first quarter of
1997,increases of 30% and 26% respectively.
On August 29, 1997, Cisco completed its purchase of DAGAZ
Technologies, Inc. and its xDSL technology and took a one-time pretax
charge of $127 million or $0.12 per share on an after-tax basis as a
write-off of in-process R&D. DAGAZ Technologies was a wholly owned
subsidiary of Integrated Network Corporation.
Actual net income for the first quarter, including the above-mentioned
write-off of purchased in-process R&D, was $337 million or $0.48 per
share, compared with $181 million or $0.26 per share for the first
quarter of 1997.
In other related news, on November 3, 1997, Cisco's board of directors
authorized a three-for-two stock split to be effective on December 16,
1997.
"We are pleased to report the 31st consecutive quarter of revenue and
earnings growth. We believe our growth rate indicates that Cisco
continues to gain market share against our traditional competitors in
most product sectors," said John Chambers, president and CEO of Cisco
Systems.
Cisco continues to make strides in providing end-to-end solutions for
each of its key markets -Enterprise, Service Provider and Small/Medium
Business- through internal development, strategic alliances, minority
investments and acquisitions.
Cisco expanded its investment in long-term strategic alliances by
announcing a unique product and services alliance with EDS, investing
in a venture with KPMG, and broadening its Microsoft and Intel
relationships.
The Cisco/EDS alliance provides companies with
mainframe-to-Internet/intranet integration and networking services.
KPMG announced that its network integration practice will standardize
on Cisco products and technologies. To enable a powerful new class of
networked applications, Cisco and Microsoft expanded the scope of
their joint development efforts on Microsoft's Windows NT 5.0 Server
Active Directory technology. This initiative is supported by more than
20 companies. Cisco and Intel will join several leading consumer
electronics companies in an effort to stimulate the worldwide market
for affordable,standards-based cable modems.
In the Enterprise market, Cisco continues to maintain its LAN
switching leadership. Key announcements include four new high-density,
high-performance 10/100 Fast Ethernet modules for the Catalyst(R) 5000
series and the launch of a new generation of Token Ring switching
solutions-a Token Ring switching module for the Catalyst 5000 and the
Catalyst 3900 stackable product.
Cisco continues to strengthen its position in the dial market with the
introduction of three carrier-class dial solutions that give service
providers high performance and the ability to offer differentiated
services. These new offerings include the Cisco AS5300 universal access server
and two integrated AccessPath(TM) dial access systems. Cisco established its
leadership in the gigabit router space by shipping the Cisco 12000 series
gigabit switch router, the industry's first carrier-class router and only
OC-12
capable solution.
In expanding its solution portfolio for the small- to medium-sized
business market, Cisco added software-based firewall solutions for Cisco
IOS(TM) access platforms and Windows NT environments. Cisco also added hubs
to its existing switching and routing products. During the first quarter,
Cisco shipped its millionth Cisco 2500 router and set new price/performance
standards
with its Catalyst 1900 and 2820 Ethernet switches, which allow customers to
transition from basic hub connectivity to intelligent switching technology.
In addition, Cisco announced the first phase of a data/voice/video
integration strategy that will ultimately encompass all of its
markets. Adding to Cisco's current voice-over-ATM and voice-over-Frame Relay
offerings, new products include voice-over-IP modules for the Cisco
3600 series and Asynchronous Transfer Mode (ATM) circuit emulation
capabilities for the Catalyst 5500. Circuit emulation allows voice traffic from
legacy systems, such as PBXs, to be transported over packet or cell
infrastructures.
"Cisco's leadership in almost all product segments, together with the
continued acceptance of end-to-end networking solutions in all of our
markets, positions us well as the preferred provider of end-to-end
network solutions. Increasingly, our customers realize that aligning
with a single networking vendor and its partners allows them to focus on
their business objectives and start using networking to gain a sustainable
competitive advantage," concluded Chambers. |
