Cisco reports flat Q2 - continues services focus

Cisco has reported flat sales growth for the second quarter, reaching the same $12bn in revenue as last year for the three months ended 23 January. 

Net income also slumped 12% annually to $2.5bn from $2.9bn.

On the sales front, the company expects to return to growth in the third quarter, predicting between 3.5% and 5.5% in extra sales annually - but helped by an extra week of trading in the quarter. 

“We are seeing encouraging signs of strength across our business,” said Chuck Robbins, Chairman and CEO. 

CFO Scott Herren added: “We executed well in Q2, delivering growth in orders and strong margins while continuing to grow deferred revenue in double-digits through the shift to more software and subscriptions.”

As a whole, total product revenue was down 1% and service revenue rose 2%. Americas turnover was down 1%, EMEA was up 2% and APJC slumped 4%.

Product revenue was led by growth in security, up 10%. Infrastructure platforms were down 3% and applications were flat. 

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