Cisco has turned in another solid quarter in Q2, CEO John Chambers says. He is "pleased with the solid revenue and earnings per share results ... but also especially pleased with our strong order momentum".
In the three months to January 28, the networking equipment giant had sales of $6.6bn, advancing 9.3 per cent year on year. Q2 net income was down a little at $1.375bn (Q2 FY05: $1.4bn). The fall can be attributed to a couple of hundred million dollars in expensed stock options.
Cisco ended the quarter with cash and cash equivalents and investments of $15bn, compared with $16.1bn at the end of the previous quarter. But the company remains a cash generating machine: it purchased $748m worth of shares in Q2.
In toto, Cisco has spent $31.4bn on buying and torching shares. Nice for shareholders, and, as the amount it spends on stock options shows, nice for employees. But nice for customers? Are we alone in thinking that Cisco’s gross margins are a little too gross? ®