Cisco Systems

Simply Amazing Results

Of all the boom stocks from the 1990s, Cisco (CSCO) is the only one that has maintained the stellar growth:

• Sales up 27%, the fastest stand-alone growth in years. Way above Cisco’s long-term growth objective of 10 to 15%
• $2.1 billion in net income, up 28%
• Cash flow from operations of $2.7 billion
• Cisco has $20.7 billion in cash and repurchased 121 million shares for a total purchase of $3.3 billion
• Gross margins stayed strong at 65%

Stand-alone service provider orders are up big, clearly suggesting that the old-time telcos continue to move away from Alcatel-Lucent-type stuff to pure IP technology. Alcatel-Lucent’s results were awful.

Chambers said business remains strong. Most analysts expected Cisco to show signs of slowing growth, however, it is hard to find. While it is tough to chase Cisco’s stock after such strong performance, its business remains strong. Chambers continues to do one of the most amazing corporate management jobs in US business history.