Cisco banks $1bn despite Q4 sales drop

John Chambers: We saw a number of positive signs this quarter in the economy and in our business

Despite revenues falling by 17.6 per cent, Cisco banked more than $1bn (£600m) in net profit during Q4 and the networking titan chose to accentuate the positive.

In the three months to 25 July, global sales were $8.5bn, down from $10.4bn in the corresponding period last year. Net income was almost cut in half year on year, falling from $2bn to $1.1bn. Today's results factor in a $174m tax charge related to early retirement benefits.

Revenue for the entire fiscal year dropped by 8.7 per cent to $36.1bn, while net profit slipped almost a quarter to $6.1bn. At the year's close Cisco has $9.4bn in deferred revenue, up by 5.6 per cent on last year. The firm also has $35bn in cash and equivalents and investments – an increase of more than a third on last year's figure.

Chief financial officer Frank Calderoni hailed his firm's stringent cost regulation.

"Today's results validate that our business strategy and disciplined expense management enabled continued profitability in a tough worldwide economic environment," he said.

"Our strategy and execution in operational excellence, our strong financial position – as evidenced by $35 billion in cash and investments – and our continued focus on innovation are delivering results."

Chief executive John Chambers also expressed pleasure at what he saw as robust figures.

"Cisco delivered very solid quarterly and annual results in a challenging economic environment, as we continued our focus on disciplined execution and our customers' success," he said.

"We are confident in our strategic position in both existing and thirty adjacent markets. We saw a number of positive signs this quarter in the economy and in our business, especially comparing our sequential quarter-over-quarter order trends.

"If we continue to see these positive order trends for the next one to two quarters, we believe there is a good chance we will look back and see that the tipping point occurred in our business in Q4."