Q3 Net Sales: $8.2 billion (decrease of 17% year over year)
Q3 Net Income: $1.3 billion GAAP; $1.8 billion non-GAAP
Q3 Earnings per Share: $0.23 GAAP (decrease of 21% year over year); $0.30 non-GAAP (decrease of 21% year over year)
Q3 Cash Flows from Operations: $2.0 billion
Total Cash, Cash Equivalents and Investments: $33.6 billion
SAN JOSE, Calif. – May 6, 2009 – Cisco® (NASDAQ:CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 25, 2009. Cisco reported third quarter net sales of $8.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.3 billion or $0.23 per share, and non-GAAP net income of $1.8 billion or $0.30 per share.
"Cisco delivered solid financial performance despite a challenging global economy and period of evolving market dynamics," said John Chambers, chairman and chief executive officer, Cisco. "These results demonstrate our ability to drive operational excellence and manage profitability across varying economic cycles. We will use this period of market transition to align and optimize resources, make strategic investments, move into market adjacencies and enhance relationships with our customers. As we exit the quarter with a compelling financial position and an innovation engine from both a products and business model perspective, we believe we are well positioned for the eventual economic recovery."
Vs. Q3 2008
Earnings per Share
Vs. Q3 2008
Earnings per Share
Net sales for the first nine months of fiscal 2009 were $27.6 billion, compared with $29.2 billion for the first nine months of fiscal 2008. Net income for the first nine months of fiscal 2009, on a GAAP basis, was $5.1 billion or $0.86 per share, compared with $6.0 billion or $0.97 per share for the first nine months of fiscal 2008. Non-GAAP net income for the first nine months of fiscal 2009 was $6.1 billion or $1.04 per share, compared with $7.2 billion or $1.16 per share for the first nine months of fiscal 2008.
A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.
Cisco will discuss third quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://www.cisco.com/go/investors.
Other Financial Highlights
Cash flows from operations were $2.0 billion for the third quarter of fiscal 2009, compared with $3.0 billion for the third quarter of fiscal 2008, and compared with $3.2 billion for the second quarter of fiscal 2009.
Cash and cash equivalents and investments were $33.6 billion at the end of the third quarter of fiscal 2009, compared with $26.2 billion at the end of fiscal 2008, and compared with $29.5 billion at the end of the second quarter of fiscal 2009.
Deferred revenue was $8.8 billion at the end of the third quarter of fiscal 2009, compared with $8.9 billion at the end of fiscal 2008, and compared with $9.3 billion at the end of the second quarter of fiscal 2009.
During the third quarter of fiscal 2009, Cisco repurchased 77 million shares of common stock at an average price of $15.57 per share for an aggregate purchase price of $1.2 billion. As of April 25, 2009, Cisco had repurchased and retired 2.8 billion shares of Cisco common stock at an average price of $20.43 per share for an aggregate purchase price of approximately $56.4 billion since the inception of the stock repurchase program. The remaining authorized repurchase amount as of April 25, 2009 was $5.6 billion with no termination date.
Days sales outstanding in accounts receivable (DSO) at the end of the third quarter of fiscal 2009 were 27 days, compared with 34 days at the end of the fourth quarter of fiscal 2008, and compared with 29 days at the end of the second quarter of fiscal 2009.
Inventory turns on a GAAP basis were 11.0 in the third quarter of fiscal 2009, compared with 11.9 in the fourth quarter of fiscal 2008, and compared with 11.6 in the second quarter of fiscal 2009. Non-GAAP inventory turns were 10.7 in the third quarter of fiscal 2009, compared with 11.6 in the fourth quarter of fiscal 2008, and compared with 11.3 in the second quarter of fiscal 2009.
During the third quarter of fiscal 2009, Cisco completed its debt offering of senior unsecured notes in an aggregate principal amount of $4.0 billion.
"Cisco has demonstrated the ability to effectively manage profitability in both good and challenging economic times," said Frank Calderoni, chief financial officer, Cisco. "With over $33 billion in cash and investments, our strong financial position provides a solid and flexible foundation that allows us to sustain our investment in innovation, drive operational excellence in the business and forge stronger customer relationships."
Select Global Business Highlights
Cisco and the Mexican Federal Government outlined collaborative approaches to education, digital government and rural connectivity to drive further socio-economic development in Mexico.
Cisco announced an initiative to increase productivity and foster innovation in Korea as part of its global intelligent urbanisation initiative, which aims to help cities around the world use the network as the platform for integrated city management, a better quality of life for citizens, and economic development.
Miami Mayor Manny Diaz launched 'Energy Smart Miami' in collaboration with Florida Power and Light, GE, Cisco and Silver Spring Networks. The project represents a model electricity system for American cities and has the potential to be the most extensive and holistic smart grid implementation in the country.
Cisco announced its intent to acquire Pure Digital Technologies, Inc., creator of the Flip Video brand, as a key part of Cisco's strategy to expand its momentum in the media-enabled home and to capture the consumer market transition to visual networking.
Cisco completed the acquisition of Richards-Zeta Building Intelligence, Inc., a leading provider of intelligent middleware technology that helps integrate building infrastructure and information technology (IT) applications over a common Internet Protocol (IP) network.
Cisco announced its intent to acquire Tidal Software, Inc., a creator of intelligent application management and automation solutions which are expected to advance Cisco's data center strategy by enhancing product and service delivery offerings.
Cisco announced the Cisco Unified Computing SystemTM to unite computing, network, storage access and virtualization resources in a single energy-efficient system designed to reduce IT infrastructure costs and complexity, help extend capital assets and improve business agility well into the future.
Cisco introduced the Cisco TelePresenceTM System 1300 Series to extend user collaboration capabilities beyond meetings to new users, applications and markets.
Cisco expanded mobile business collaboration to a broader range of devices and users with the WebEx® Meeting Center for smart phones.
In terms of innovation in the underlying business model, Cisco has embraced a collaborative operating model that is helping to provide the speed, scale and replication as Cisco realigns resources to now address 29 cross-functional priorities and market adjacencies while also, in the third quarter, reducing expenses.
Select Customer Announcements
AT&T and Cisco announced that a BAE Systems operating group is aiming to enable closer collaboration across global and regional teams using Cisco TelePresence systems, which is expected to help accelerate decision-making processes and problem-solving for high-priority projects.
The National Basketball Association (NBA) and ESPN utilized Cisco TelePresence technology to create an immersive 'in person' experience to bring NBA players and legends closer to fans at the NBA All-Star Jam Session in Phoenix.
Yahoo! Japan adopted the Cisco NexusTM 7000 Series as the core switch for its new data center in response to increased consumer demand for Yahoo! Japan services.
In India, the government of the state of Karnataka and Cisco announced that they will work to develop a road map for an intelligent and sustainable Bangalore city with a focus on public safety and security, health care, and energy.
Kazakh service provider, AsiaBell, introduced mobile WiMAX services to citizens in central Kazakhstan based on the Cisco Broadband Wireless Solution with innovative adaptive beamforming technologies.
Q3 FY09 conference call to discuss Cisco's results along with its business outlook will be held at 1:30 p.m. Pacific Time, Wednesday, May 6, 2009. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
Conference call replay will be available from 4:30 p.m. Pacific Time, May 6, 2009 to 4:30 p.m. Pacific Time, May 13, 2009 at 866-357-4205 (United States) or 203-369-0122 (international). The replay also will be available via webcast from May 6, 2009 through July 17, 2009 on the Cisco Investor Relations website at http://www.cisco.com/go/investors.
Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 6, 2009. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at http://www.cisco.com/go/investors.
A Q&A with Cisco's Chairman and CEO John Chambers and CFO Frank Calderoni about Q3 FY09 results will be available at http://newsroom.cisco.com.
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