Even though sales from its video service provider segment fell 26 percent in its fiscal third quarter, Cisco Systems beat Wall Street analysts' estimates, sending the vendor's stock up in after-hours trading on Wednesday.
"We are seeing some signs of stabilization in the [service provider] business, but believe it will take multiple quarters to return to growth. We will continue to make changes we need to, to lead in the service provider market," Cisco CEO John Chambers said on Wednesday's earnings call.
Cisco posted third quarter earnings of 51 cents per share on sales of $11.55 billion, which was better than analysts' expectations of 48 cents on $11.36 billion. But growth for the company remains elusive. Revenues were down 5.5 percent year-over-year, while net income dropped 3.2 percent, to $2.6 billion. Chambers said Cisco expects fiscal fourth quarter profits to be in the range of 51 cents to 53 cents per share, in-line or slightly ahead of analysts' expectations of 51 cents.
While Chambers, who has said in the past he plans to retire in the couple of years, said he's pleased with the company's results het reiterated during the conference call that growth is Cisco's top priority going forward. "Next quarter's set up pretty well, but we got some real heavy lifting to do and I'm sure a couple of bumps along the way especially in emerging markets," he said.
For more:
- the New York Times has this story
- Multichannel News has this story
- Forbes has this story
Earnings summary: Cable and IPTV in the first quarter of 2014
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