Cisco Q1 revenue up slightly

Von Matt Hamblen

Cisco Systems Inc. Tuesday reported net revenue of US$6 billion for the first quarter of its 2005 fiscal year, a slight uptick compared to the previous quarter but up 17.1 percent from a year ago.

The $6 billion is 0.8 percent higher than in the final quarter of the company"s past fiscal year, but up significantly from the $5.1 billion in net revenue the company posted in the first quarter of fiscal 2004.

Net income for the quarter, which ended Oct. 30, was $1.4 billion, or 21 cents per share.

The earnings report represents the sixth straight quarter of revenue growth for Cisco; company officials forecast that the second quarter will bring 1 percent to 3 percent growth in revenue. Cisco added 715 workers in the first quarter, bringing its current workforce to 35,086 people. About half of the new employees were added through acquisitions. The company acquired all or part of five companies during the just-completed quarter.

In response to questions from analysts after the earnings report was released, Cisco CEO John Chambers said he believes the biggest long-term competitive threat will come from Asian network equipment makers. Cisco, Chambers said, "will not lack for competitors in the future."

Looking ahead to future technologies, Chambers said Cisco will weigh many changes, including advances in higher-intelligence switching gear, sometimes called Layer 4-7 switching. That"s a reference to the Open Systems Interconnection model used by engineers to describe the relationship of a network function to a user. Layers 4-7 deal with end-to-end communication between a message source and a message destination, while Layers 1-3 are devoted to network access.

Chambers said he still has a "healthy paranoia" about the market for network equipment in coming months, while noting four different shifts in the market during the past 15 months.