Cisco Posts Strong Q2 Growth

Cisco Systems on Feb. 6 showed that it has continued to roll up healthy earnings increases, reporting a 40 percent rise in net income and earnings per share at $1.9 billion and 31 cents per share respectively for its second fiscal quarter of 2007.

The earnings increase came on the back of a revenue rise of 27 percent to $8.4 billion for the quarter from $6.6 billion in the same quarter a year earlier. Cisco’s acquisition of Scientific Atlanta in the third quarter of 2006 contributed $639 million in revenues to Cisco coffers.

For the first six months of its fiscal year 2007, Cisco’s revenues rose to $16.6 billion from $13.2 billion, with Scientific Atlanta contributing $1.2 billion of that.

Cisco said it expects the momentum to continue into the next two quarters, with projections of a revenue increase of 15 to 17 percent for its third fiscal quarter and 14 to 16 percent for its fourth fiscal quarter. Cisco expects to generate revenues of $8.7 billion to $8.8 billion for its third fiscal quarter and $9.0 billion to $9.3 billion for the fourth fiscal quarter.

The continued momentum for fiscal 2007 boosted Cisco’s expectations for full-year revenues to a 16 to 17 percent increase—well above its long-term projections of 10 to 15 percent.

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Cisco’s big bet on its Scientific Atlanta acquisition thus far has paid off better than expected and will continue to boost Cisco’s revenues. Revenue from the Scientific Atlanta acquisition is expected to increase between 19 to 20 percent in the third fiscal quarter.

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