Cisco Reports Fourth Quarter and Fiscal Year 2010 Earnings

August 11, 2010 - Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its fourth quarter and fiscal year results for the period ended July 31, 2010. Cisco reported fourth quarter net sales of $10.8 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.9 billion or $0.33 per share, and non-GAAP net income of $2.5 billion or $0.43 per share.

"This was yet another very strong quarter with a number of record financial results for Cisco, closing the fiscal year in a tremendous position of strength-a compelling financial model, a well-tuned innovation engine and solid execution on our growth strategy," said John Chambers, chairman and CEO, Cisco. Chambers continued, "Whether the global economy continues to show mixed signals or not-the strength of our financial model and profit generation serves us well. As we to continue to successfully grow our business and share of IT investments, our focus is squarely on helping our customers accelerate productivity and growth. We are very confident in our strategy, and will continue to aggressively move into new areas where the network is becoming the platform, and where our customers want us to invest and innovate."

 

Q4 GAAP Results

 

Q4 2010

Q4 2009

Vs. Q4 2009

Net Sales

$10.8 billion

$8.5 billion

27.0 %

Net Income

$1.9 billion

$1.1 billion

79.0 %

Earnings per Share

$0.33

$0.19

73.7 %

Q4 Non-GAAP Results

 

Q4 2010

Q4 2009

Vs. Q4 2009

Net Income

$2.5 billion

$1.8 billion

36.3 %

Earnings per Share

$0.43

$0.31

38.7 %

Fiscal Year GAAP Results

 

FY 2010

FY 2009

Vs. FY 2009

Net Sales

$40.0 billion

$36.1 billion

10.9 %

Net Income

$7.8 billion

$6.1 billion

26.6 %

Earnings per Share

$1.33

$1.05

26.7 %

Fiscal Year Non-GAAP Results

 

FY 2010

FY 2009

Vs. FY 2009

Net Income

$9.4 billion

$8.0 billion

18.6 %

Earnings per Share

$1.61

$1.35

19.3 %

GAAP net income and GAAP earnings per share for the fourth quarter and fiscal year of 2010 included a pretax charge of $120 million or $0.02 per share related to impairments and other charges related to excess facilities. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.

Call information and related charts are available at http:// investor.cisco.com. To view a video of Cisco's CFO discussing fourth quarter results, visit http://blogs.cisco.com.

Related Information
Cisco Outlines Fiscal 2010 Year End and 4th Quarter Technology & Customer Highlights

Other Financial Highlights

  • Cash flows from operations were $3.2 billion for the fourth quarter of fiscal 2010, compared with $3.0 billion for the third quarter of fiscal 2010, and compared with $2.0 billion for the fourth quarter of fiscal 2009. Cash flows from operations were $10.2 billion for fiscal 2010, compared with $9.9 billion for fiscal 2009.
  • Cash and cash equivalents and investments were $39.9 billion at the end of fiscal 2010, compared with $35.0 billion at the end of fiscal 2009, and compared with $39.1 billion at the end of the third quarter of fiscal 2010.
  • During the fourth quarter of fiscal 2010, Cisco repurchased 99 million shares of common stock at an average price of $23.33 per share for an aggregate purchase price of $2.3 billion. During fiscal 2010, Cisco repurchased 325 million shares of common stock at an average price of $24.02 per share for an aggregate purchase price of $7.8 billion. As of July 31, 2010, Cisco had repurchased 3.1 billion shares of Cisco common stock at an average price of $20.78 per share for an aggregate purchase price of approximately $65.0 billion since the inception of the stock repurchase program. The remaining authorized repurchase amount as of July 31, 2010 was $7.0 billion with no termination date.
  • Days sales outstanding in accounts receivable (DSO) at the end of the fourth quarter of fiscal 2010 were 41 days, compared with 39 days at the end of the third quarter of fiscal 2010, and compared with 34 days at the end of the fourth quarter of fiscal 2009.
  • Inventory turns on a GAAP basis were 12.6 in the fourth quarter of fiscal 2010, compared with 11.5 in the third quarter of fiscal 2010, and compared with 11.7 in the fourth quarter of fiscal 2009. Non-GAAP inventory turns were 12.1 in the fourth quarter of fiscal 2010, compared with 11.1 in the third quarter of fiscal 2010, and compared with 11.3 in the fourth quarter of fiscal 2009.

"We are very pleased with our results for the fourth quarter, achieving a total revenue increase of approximately 27 percent year over year at the upper end of our guidance, alongside the exceptional quality of our earnings," said Frank Calderoni, chief financial officer, Cisco. "During fiscal 2010 we generated more than $10 billion in cash from operations and saw growth in our deferred revenue, working capital, backlog, and cash and investments. We will continue to use this strong financial position to expand our portfolio and deliver a compelling value proposition for our investors, partners, customers and employees."

Select Global Business Highlights

  • Cisco announced and completed the acquisition of CoreOptics Inc., a designer of digital signal processing solutions for high-speed optical networking applications.
  • Cisco announced and completed the acquisition of MOTO Development Group, a design consulting firm that develops products and product strategies for the consumer industry.
  • Cisco completed its acquisition of the set-top box business of DVN (Holdings) Ltd., a market and technology leader in digital cable solutions in China that shares Cisco's vision of a high-performance, scalable and services-rich cable interactive platform extending into every home.
  • Cisco made a commitment to invest up to $1 billion to encourage entrepreneurship and sustainable innovation in Russia as a partner in achieving the country's goals.

Cisco Innovation

  • Cisco launched Cisco Cius™, an innovative mobile collaboration business tablet designed to deliver virtual desktop integration with anywhere, anytime access.
  • As part of its Cisco Data Center 3.0 strategy, Cisco announced its new FabricPath networking technology to help customers increase the flexibility of their data centers as they become more virtualized and cloud-based.
  • Cisco unveiled energy management solutions to help utilities, consumers and businesses better monitor and manage their energy consumption for cost and carbon savings. The announcement builds on the initial product offerings from the Cisco Connected Grid portfolio to help utilities more reliably and efficiently deliver electric power from generation facilities to businesses and homes.
  • Cisco announced that Cisco Quad™, an enterprise collaboration platform, will be available later this calendar year via native iPad and iPhone applications. Cisco Quad aims to break down communication barriers by helping workers to easily connect and collaborate.
  • Cisco announced a range of new products and upgrades to deliver on its commitment to advance Cisco TelePresence™ interoperability across its portfolio and with third-party systems.
  • Cisco announced the availability of the Cisco Hosted Collaboration Solution, an offering that allows partners to provide a wide range of Cisco collaboration applications to their customers, via the cloud, using an "as a service" model.

Select Customer Announcements

  • AT&T selected Cisco as one of three domain suppliers for IP MultiProtocol Label Switching , Ethernet and Evolved Packet Core equipment for its industry-leading IP network. The multi-year selection covers equipment used to route and forward IP-based voice, video and data traffic through AT&T's network.
  • Station Casinos Inc., a casino and resort operator in Las Vegas, selected the Cisco Unified Computing System to streamline customer operations and drive business growth with Cisco Data Center 3.0 as the architectural platform for its virtualization strategy.
  • ESPN used Cisco TelePresence to deliver live and recorded video coverage of soccer matches and to connect the global soccer community with teams, players and coaches at the 2010 FIFA World Cup Soccer Tournament in South Africa.
  • Lavasa Corp. Ltd., Cisco and Wipro signed definitive agreements for Cisco to participate in MyCity Technologies Ltd., a company established to provide information and communications technology services in the new development of Lavasa City, India's first complete e-city.
  • Saudi Telecom Company chose Cisco technology solutions to introduce managed data center services to the Saudi market. This represents the first Vblock Infrastructure Package win for Cisco in the Middle East region.
  • The London Organising Committee of the Olympic Games and Paralympic Games adopted the Cisco Eos® SaaS platform for the London 2012 Olympic Games and Paralympic Games.

 

About Cisco

Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com. Cisco equipment in Europe is supplied by Cisco Systems International BV, a wholly owned subsidiary of Cisco Systems, Inc.

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