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Cisco Q4 2012 Earnings: Data Center Boom, TelePresence Bust

August 16, 2012 | Telepresence Options
Cisco Telepresenceresized.png
Aug. 16th, 2012 by The VAR Guy

Cisco Systems' (NASDAQ: CSCO) Q4 2012 earnings, announced yesterday, confirmed booming data center sales but revealed serious weakness in the TelePresence (high definition video conferencing) market. The VAR Guy is starting to wonder if big, expensive TelePresence conference rooms are a passing fad, crushed by free, personal video conferencing software like Skype. Can Cisco's Jabber software help the company to regain some collaboration momentum? Here's the update.

First, let's start with the good news from Cisco -- and there was plenty of it:

  • Q4 net sales were $11.7 billion, up a respectable 4 percent year over year.
  • Q4 net income skyrocketed 56 percent to $1.9 billion amid tight cost controls; earnings per share rose 64 percent.
  • Cisco's Q4 cloud revenues grew nearly 100 percent.
  • Chambers is cautiously optimistic about the service provider market, where he expects Cisco take share from Juniper.
  • It was a record year in terms of revenues and earnings per share for Cisco. Impressive.
  • Cisco is sitting on $48.7 billion in cash. Oh my. More acquisitions coming? Safe bet: Yes.
  • Data Center revenues grew 42 percent from Q3 and UCS (unified compute system) bookings grew 58 percent vs. Q4 2011. Again, very impressive.

According to Cisco CEO John Chambers:

    "The innovation we're driving and our traction in the data center is truly incredible, as measured on with every scale, revenue growth, market share and customer mind share. Our ability to move first in this market transition to unified compute, storage and networking and deliver on long-term ongoing innovation around unified fabric, unified compute and unified management has helped solidify our position as a leader in the next generation data centers."

So far, so good. Great stuff.

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