Robbins vows to 'continue the pace' on M&A

Cisco reports flat sales but soaring profits in second quarter

Cisco's chief executive Chuck Robbins has promised to keep up the pace of its acquisition strategy as the firm reports Q2 results which beat Wall Street's expectations.

For the three months to 23 January, Cisco's GAAP net profits rose by almost a third (31 per cent) annually to $3.1bn (£2.14bn) on sales which were flat at $11.9bn - above analysts' expectations widely reported to have been pegged at $11.76bn.

Cisco's chief executive Chuck Robbins has been on something of a shopping spree since he took over the top job from John Chambers last summer.

So far under his leadership, Cisco has bought a number of firms, including UK firm Portcullis, security player Lancope and IoT company ParStream - the latter two were acquired just a day apart. Just last week, Cisco bought IoT player Jasper.

Robbins predicted in September that the tech world is heading for "tremendous consolidation" and on the earnings call last night, he said Cisco would carry on with its M&A bonanza.

"We have built a strategic framework that is guiding us for what we believe we need to have in our portfolio and the architectures that we need to be able to build relative to cloud, security, analytics, SaaS and IoT," he said.

"We have built that framework with our team in the first two or three months that I was in the role. We then stepped back and looked at where do we have R&D activities that are going to build some of these opportunities, and where are there opportunities like what we saw with Jasper where we can move and actually fill a substantive portion of our portfolio. And so that's what's driving us.

"It's very much connected to our broader strategy and connected to what I believe that our customers care about in the future. And I would say that you should expect us to continue the pace."

Robbins added that the start of this year has been "one of the most volatile times in the global markets", which led to a slowdown in spending which affected Cisco. But he said there is an upside to the market fluctuations in terms of its M&A plans.

"Obviously valuations in today's market - that's one piece of good news - is that they're more attractive," he said.