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Networking giant Cisco today reported a 32.9 per cent rise in net profit to $2.4 billion for the September quarter on the back of strong growth in emerging markets, including India.
The company had posted a net profit of USD 1.8 billion in the same quarter last fiscal.
The US-based firm saw its revenues grow by 3.6 per cent to $12.7 billion in the quarter under review as against $12.2 billion in the year-ago period, helped by over 40 per cent growth in markets like India and China.
“First quarter was a very strong quarter. We are accelerating our ability to deliver on growth opportunities, aggressively driving our cloud business and delivering continued strength in our deferred product revenue, as we sell more of our portfolio in software and cloud models,” Cisco CEO and Director Charles Robbins said on a conference call.
Q2 outlook muted
However, the company put out a lower-than-expected revenue forecast for the second quarter at flat to 2 per cent year-on- year growth, impacted by lower than expected order growth.
This pulled its stocks down on the US bourses yesterday.
“I recognise that our second quarter guidance that we just provided is below what the market had expected. In the first quarter, we saw lower than expected order growth, driven largely by uncertainty from macro and currency impacts, primarily outside the US. Despite these headwinds, I believe we are executing incredibly well in a challenging environment,” he said.
Growth drivers
Talking about the growth drivers in the first quarter, CFO and Executive Vice President Kelly Kramer said America grew 1 per cent, Europe, the Middle East & Africa (EMEA) 3 per cent, and Asia Pacific, Japan and China was 9 per cent.
“Total emerging markets grew a very solid 11 per cent with the BRICS plus Mexico accelerating to 21 per cent growth,” she added.
Robbins said the company has witnessed over 40 per cent growth in India.
“In India, where we’ve been focused on a lot of country’s digitisation efforts with the Prime Minister (Narendra Modi) and many of the ministries, and they really see the value of technology and what it can do for their country, it (India business) too was up over 40 per cent,” he said.
Cisco’s India business has continued to grow at a steady pace over the last five quarters.
The company’s cash and cash equivalents and investments at the end of September was USD 59.1 billion.
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