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Cisco's Q1'FY12 gross margin, switching and NGN routing revenue declined year over year

Furthermore, Cisco's Q1'FY12 operating cash flow, service gross margin, service provider video, wireless, security and other product revenues sequentially declined.

Thu, 11/10/11 - 4:30am    View comments

CiscoAccording to Cisco's Q1'FY12 earnings call transcript:

"We've also updated our product revenue reporting to better align with our 5 foundational priorities. Expect that this enhanced reporting will be helpful to investors. This change provides revenue reporting for a number of components of our prior new products category.

"Effective this quarter, we are providing total revenue and year-over-year growth disclosures, switching, next-generation or NGN routing; collaboration; security; wireless; service provider video; data center and other products. There are also certain reclassifications which are outlined in the slides that accompany this call."

Cisco's newly reorganized product category revenue reporting:

Evolution of Cisco Product Reporting
Source: Cisco Systems

Additionally, Cisco CFO Frank Calderoni revealed that at the end of the first quarter, Cisco's headcount totaled only 63,465 down approximately -8,400 employees. Also, Cisco's cash, cash equivalents and investments at the end of the quarter were $44.4 billion, down -$197 million from Q4'FY11. Of this total, $3.8 billion was held within the U.S. at the end of Q1'FY12.

Catching my attention during the earnings call was Cisco CEO John Chambers revealing that Q1'FY12 mid-low end routing revenue declined by -16% year-over-year.

Surprisingly year-over-year, Cisco's switching revenue dropped by -$14 million, next generation network (NGN) routing revenue fell by -$69 million and other product revenue declined -$74 million.

Sequentially, Cisco's service provider video revenue plummeted -$103 million, wireless declined -$43 million, security was off by -$4 million and other product was down by -$21 million.

Cisco's sequential quarterly operating cash flow declines (highlighted in yellow)

(in millions) Q1'FY11 Q2'FY11 Q3'FY11 Q4'FY11 Q1'FY12
Operating Cash Flow $1,667 $2,609 $2,979 $2,824 $2,333

Source: U.S. Securities and Exchange Commission

Cisco's sequential quarterly margin declines (highlighted in yellow)

  Q1'FY11 Q2'FY11 Q3'FY11 Q4'FY11 Q1'FY12
Product Gross Margin 62.65% 58.93% 60.35% 59.88% 60.19%
Service Gross Margin 63.60% 64.80% 64.95% 66.79% 65.14%
Gross Margin 62.83% 60.16% 61.28% 61.28% 61.21%

Source: U.S. Securities and Exchange Commission

Cisco's sequential quarterly sales declines (highlighted in yellow)

Cisco's Sales
(in millions)
Q1'FY11 Q2'FY11 Q3'FY11 Q4'FY11 Q1'FY12
Switching $3,689 $3,341 $3,480 $3,620 $3,675
NGN Routing 2,177 1,919 2,150 2,018 2,108
Collaboration 977 952 1,008 1,076 1,093
Service Provider Video 778 825 898 982 879
Wireless 334 335 353 405 362
Security 290 270 316 324 320
Data Center 125 177 173 219 259
Other Product 330 417 291 277 256
Services 2,050 2,171 2,197 2,274 2,304
TOTAL $10,750 $10,407 $10,866 $11,195 $11,256

Source: Cisco Systems

View Cisco's previous product category revenue history.

Related story:

Cisco inadvertently reveals never before seen FY11 product revenue results

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