Gokul Blog — A conversation on VoIP, IMS, Cisco and Just about Anything

Deeper analysis of VoIP

Investors spooked by Cisco’s Third Quarter Results

Posted by tggokul on May 9, 2007

Though Cisco’s fiscal third-quarter profit surged by 34 percent, its stock fell down in after hours trading because of weakness in Cisco’s core areas of business.

The fear among investors stems from the fact that there is a slowdown in orders from US businesses, even though the sales in the other regions grew at a double digit rate. The fear is understandable considering that the first three months, US enterprise business grew at a rapid pace at 20%, but hence after has dwindled down to single digit growth. Obviously, the investors are at a loss to categorize this downturn as a temporary one or as a start of a huge deceleration.

It usually takes three quarters to predict a behaviour and since only the last two quarters have been bad in this segment for Cisco, we have to wait for another quarter before passing judgements. Also, I personally don’t think it is a big deal, because Cisco is making huge inroads in the other markets and they would more than comfortably make up for the lost ground.

But then, it is always good to be strong in your home turf before winning over foreign lands 🙂

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