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Solid quarter for Cisco but clouds on horizon
New York (AFP) Feb 4, 2009 US computer networking giant Cisco reported a solid quarterly performance Wednesday but warned the global economic downturn would take its toll in the current quarter and layoffs cannot be ruled out. Cisco reported a net profit of 1.5 billion dollars for the October-December quarter of its fiscal year, down 27 percent from the 2.1 billion dollars during the same period a year ago but better than Wall Street analysts' expectations. Revenue fell 7.5 percent to 9.1 billion dollars in the quarter, the San Jose, California-based maker of switches and routers said. The quarter included a four-day shutdown over the New Year's holiday of nearly all of Cisco's operations in the United States and Canada to cut costs. "Cisco showcased solid financial strength during a period of significant economic challenge," Cisco chairman and chief executive John Chambers said in a statement. "We remain comfortable with our long-term vision and strategy as we move into new market adjacencies and prioritize our existing opportunities. "We intend to accelerate the alignment of our resources to prioritize future growth opportunities, gradually decrease our operating expenses, while building even stronger customer relationships to position Cisco for ongoing, long-term market leadership," he added. In a conference call with analysts and reporters, Chambers said he expected revenue to fall by between 15 percent and 20 percent this quarter, more than forecast by analysts. He said the company hoped to avoid layoffs but a dramatic deterioration of the economic situation could lead to job cuts of at least 10 percent of the company's workforce of some 67,000. In electronic after-hours trading after the results were released, Cisco's share price fell 3.72 percent to 15.25 dollars. Related Links The Economy
China's jobless migrants confront a dim future
Zhugao, China (AFP) Feb 5, 2009Newly unemployed and careworn at just 19, Zhan Ke is typical of a swelling mass of Chinese with no jobs and dim futures who pose an acute challenge for China's leaders as the economy stumbles. |
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