Cisco Still Sees Growth

In a post-earnings conference call, Cisco Systems (CSCO) CEO John Chambers said the company is still confident in its long-term growth forecast of 12%-17%. He also said the current economic challenges “will remain with us” for a few quarter.

For the fiscal first quarter, the company sees revenue growth of about 8%. That implies revenue of $10.31 billion, slightly below the Street consensus of $10.39 billion.

For fiscal Q2, Chambers said, Cisco see 8.5% growth year over year. That implies revenue of $10.67 billion, a bit below the Street at $10.76 billion.

Chambers said Cisco is not going to provide full year guidance for fiscal 2009 at this time.

In the fourth quarter, Chambers said, revenue was a record at $10.4 billion, the first $10 billion quarter. Revenue was up 10%. Non-GAAP EPS was up 11%. Non-GAAP gross margins 65.2%. Order growth was 10%; service orders 20%; product book-to-bill was “comfortably above 1.”

Orders: China over 30%; India over 20%; Mexico and Russia over 40%; Brazil 30%; emerging countries in Asia/Pacific grew 23%. Emerging markets ex Asia grew 10%. Asia Pacific overall grew 19% in orders; Japan 10%; Europe 11%; U.S. and Canada 7%. Routing grew 8%; switching 5%; advanced technologies 15%, including 29% for unified communications. Telepresence up 500% year over year. Physical security 250%.

Enterprise/public sector 10% growth; including enterprise up 13%, and public sector up 4%. Commercial orders were up 17%. Service provider 5%.

U.S. enterprise order growth in the quarter was up 13%, up from 6% in Q3.

Cisco  this afternoon posted revenue for its fiscal fourth quarter ended July of $10.4 billion, with non-GAAP EPS of 40 cents a share. The Street had been looking for $10.31 billion and 39 cents. The company had projected revenue up 9%-10%, which implied $10.28 billion to $10.37 billion.

In a statement, CEO John Chambers said that the strong results “demonstrate the company’s ability to execute.” He said that the market is “clearly in transition,” and that Cisco “will yuse this time an an opportunity to expand our share of customer spend and to aggressively move into market adjacencies.”

Cash flow from operations was $3.5 billion, up from $3 billion in Q3, and $2.7 billion a year ago. Cash at quarter end was $26.2 billion, up from $24.4 billion one quarter earlier. The company bought back 54 million shares in the latest quarter for $1.35 billion, for an average price of $25.11 a share.

DSOs fell to 34 days at quarter end, from 39 days at the end of Q3.

Gross margin in the quarter was 64.3%, flat with both a year ago and Q3; the company had projected a 65% gross margin for the quarter. Non-GAAP gross margin was 65.2%.

The company did not provide any forward guidance in the release.

In after hours trading, the stock is up $1.54, or 6.8%, to $24.19.