Seeking Alpha

Cisco's guidance mixed; more job cuts planned

Cisco (NASDAQ:CSCO) guides on its FQ4 CC for flat to 1% Y/Y FQ1 revenue growth and FQ1 EPS of $0.51-$0.53 vs. a consensus for flat growth and EPS of $0.53. Gross margin is expected to be in a range of 61%-62% vs. 61.8% in FQ4.

Cisco plans to cut another 6K jobs (8% of the workforce), and to record a $0.14-$0.18 FQ1 GAAP EPS charge.

John Chambers has offered cautious remarks about service provider and emerging markets demand. Carrier sales are expected to be weak for the next several quarters, and Cisco isn't expecting a major near-term recovery in emerging markets demand.

Total product orders only rose 1% Y/Y in FQ4. Americas orders +2%, EMEA +2%, Asia-Pac -7%. Enterprise orders +9%, SMBs +8%, public sector flat, service provider -11%.

U.S. orders +5% (strong enterprise/SMB demand) and India +18%, but China -23% and other emerging Asian markets -34%.

Weak points: Routing revenue -7% Y/Y, switching -4%, service provider video -10%, collaboration -4%. Strong points: Data center +30% (UCS servers now on a $3B/year run rate), security +29% (boosted by SourceFire).

CSCO -1.1% AH. FQ4 results, details

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Comments (9)
  • Albright85
    , contributor
    Comments (40) | Send Message
    6k down, 24k to go. With a workforce of 50k, Cisco will only have three to four employees for every job they have.


    If Cisco ever wants to break out, they need to stop becoming the company you get a job at when you want to retire early and work 2 hour days. The first step is to get rid of the people who do that, and about half of management. Then maybe Cisco will be in a place to drive to growth.
    13 Aug 2014, 07:26 PM Reply Like
  • KenG3315
    , contributor
    Comments (78) | Send Message
    Hey Albright85,


    Do you actually know anything about Cisco? Seems like a lot of anger here and no real comments of any value.
    13 Aug 2014, 07:37 PM Reply Like
  • Albright85
    , contributor
    Comments (40) | Send Message
    Yea, that came off harsh. I'm a former employee.


    The nicer way to put it would be "Cisco still has a lot of fat to cut from 2007"
    13 Aug 2014, 08:06 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1151) | Send Message
    John Chambers should be the first employee to be "cut". With Steve Ballmer finally excised from Microsoft, Chambers is without a doubt the single worst tech CEO out there. The day Chambers is shown the door, this stock immediately gets more interesting.
    13 Aug 2014, 08:59 PM Reply Like
  • Albright85
    , contributor
    Comments (40) | Send Message
    He's a .com CEO in a debt crisis world.
    13 Aug 2014, 09:05 PM Reply Like
  • superuser
    , contributor
    Comments (40) | Send Message
    agreed with Albright85, too much employee relaxation. This is impacting overall productivity and costs for company. Need a strict on site work policy, similar to Yahoo, with clock in and clock out system, just to let employee know 8 hours are being recorded somewhere. Lot of Politics at middle management level, cancer currently endorsed by Cisco. Needs to be shrieked as much as possible.
    13 Aug 2014, 09:53 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
    Carol Bartz should know better
    14 Aug 2014, 12:57 AM Reply Like
  • HuhWhat
    , contributor
    Comments (29) | Send Message
    There must be an awful lot of money stuffed down the back of the sofa for quarters like this.


    11% down in the Service Provider market is disaster and Enterprise spending is slowing everywhere but with Cisco. Can't help but wonder how those numbers got "massaged".
    14 Aug 2014, 03:46 AM Reply Like
  • gjg49
    , contributor
    Comments (433) | Send Message
    Chambers is the worst CEO of any company (tech or otherwise) and including or excluding Ballmer. Chambers was not even a good CEO during the dot-com era. The stock did well, but despite him.
    14 Aug 2014, 09:23 AM Reply Like
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