Cisco plans for more growth as Q2 profits up by nearly half

Vendor concerned about global economy despite posting record sales growth for eighth quarter in a row

Cisco claims its channel partners have helped it almost double its UCS [unified computing system] customer base annually in its second quarter as it announces a profit swell of 44 per cent and an eighth consecutive quarter of record sales.

For the three months to 26 January, the networking giant's GAAP net income shot up by 44 per cent to $3.1bn (£2bn) on sales which crept up five per cent to $12.1bn, which just topped analyst predictions of $12.06bn.

Its wireless business continued to be its fastest-growing segment, registering 27 per cent growth.

Cisco claimed that the number of customers using its UCS offering has topped 20,000, an 87 per cent annual boost. It added that its 3,000 global channel partners have contributed to its huge growth.

Despite this success, economic challenges, especially in Europe, are still problematic, the vendor added.

Revenue in the Americas region grew nine per cent year on year in Q2, while the Asia-Pacific, Japan and China region saw sales rise by eight per cent in the same period, but Europe's revenue slumped by five per cent.

Frank Calderoni, Cisco's chief financial officer, said he believed the vendor's momentum will combat the risky political and economic landscape across all regions.

He added that Q2's flurry of acquisitions, including cloud-managed networks firm Meraki, will help to drive innovation across the company, and that the sale of the Linksys product line will further aid growth.

Speaking on an earnings call, transribed by Seeking Alpha, he said: "Each of these actions fits within our strategy to accelerate the growth and profitability of our business, and with each acquisition we acquire talent and expertise in addition to intellectual property."

John Chambers, Cisco's chief executive, said the vendor has done well despite the economic environment.

"Cisco delivered record earnings per share this quarter and record revenue for the eighth quarter in a row in a challenging economic environment," he added.

"We continue to drive the innovation, quality and leadership our customers expect, and we remain focused on consistent returns to our shareholders."