Cisco plays a dominant role in the network infrastructure that drives the backbone of technology. If the quarterly results of Cisco are any indication, the tech industry at least is rebounding nicely from the recent global economic meltdown.
Sales are up 27 percent over the same quarter in 2009, which is a solid improvement. But, the truly impressive results are that profit is up nearly 63 percent over 2009, and earnings per share is up almost 61 percent.
"Our financial results were outstanding, achieving record level revenue and earnings per share results. We witnessed a return to strong balanced growth across geographies, products and customer segments that we haven't seen since before the global economic challenges began. We emerge from this downturn gaining market share, a larger share of the total wallet spend of our customers, dramatically improved customer relations as a trusted technology and business partner, and having next-generation products in almost every product category. It is clear that our game plan for how to handle economic downturns is hitting on all cylinders," said John Chambers, chairman and CEO of Cisco in a statement.
Chambers continued, "Our innovation and operational engines are exceeding our expectations. This applies to products, organization structures, business models, and movements into 30+ new market adjacencies. From almost every measurement perspective - revenues, earnings per share, new products, successful acquisitions, internal startups - our results in Q3 were the proof points that our strategy is working and was probably the strongest quarter in our history."
Cisco continues to work aggressively in its core markets. It completed the purchase of Tandberg--strengthening its Telepresence product line and adding to the portfolio of video conferencing technologies. Cisco also took advantage of the RSA Security Conference to unveil its new AnyConnect Secure VPN initiative which enables a seamless, always-on secure connection between remote and roaming workers and corporate network resources.
Cisco may also be looking to jump into new arenas. There is a rumor that Cisco may be considering throwing its hat into the tablet PC ring. The tablet PC arena has lost two of its most notable potential contenders--the Microsoft Courier and the HP Slate, but HP is allegedly bouncing back with a WebOS-based tablet. It's not Cisco's forte but it appears to be a hot market segment and Cisco may not want to sit back and watch Apple iPad have all the fun.
If Cisco is having the strongest quarter in its history, that is saying a lot, and it says as much about the state of the tech industry as a whole as it does about Cisco itself. In order for Cisco to have a great quarter, enterprise customers have to be loosening the purse strings and investing in infrastructure. Organizations that invest in infrastructure will most likely also invest in servers and other assets to put the infrastructure investment to good use.
It seems that economy has recovered, or at least it is headed determinedly in that direction, and the tech industry is a benefactor of the more freely flowing cash.
Share your thoughts in the comments. Has your company committed more money to infrastructure investments and the IT budget this year? Does the solid performance of Cisco reflect an upswing in tech projects?