Analysts on average predicted adjusted earnings of 60 cents a share on sales of $12.57 billion, according to FactSet.
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Shares of the company were down 1.4 percent in after-hours trade to $30.30. Fiscal year revenue of $48.7 billion grew 3% from the prior year.
Chief executive Chuck Robbins, who took over in July 2015, has been working to boost growth by shifting Cisco’s offerings toward software-based networking, security and management products, which customers increasingly prefer because they’re less expensive and more versatile.
It wouldn’t be a shock if Cisco jettisoned even more workers in during the next year or two, given what has happened at other big tech companies that have gone through several waves of layoffs. Robbins touted the company’s strong performance in Q4 and how it has been rapidly and successfully moving away from hardware, toward software and cloud-based services. “It will be the fabric”.
The plan to eliminate 5,500 positions came as earnings reports showed Cisco’s profit for the fiscal year climbed to US$10.7 billion, 20 per cent more than the previous year. But that software only works on Cisco equipment; many backers of what the industry calls software-defined networking favor programs that can work on equipment from multiple vendors. The company projected sales growth of as much as 3 percent in the period that ended in July, compared with analysts’ projections for a revenue decline.
Other areas of health included “collaboration” products, up 6%, wireless products, up 5%, and security products, up a whopping 16%, at $540 million, or 4% of total revenue. “It is a tectonic shift for a company of that type”, said Glenn O’Donnell, an analyst at Forrester Research.
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Cisco’s fourth-quarter net profit rose to $2.81 billion, or 56 cents per share, from $2.32 billion, or 45 cents, a year earlier. In August 2014, for example, Mr. Chambers announced plans to shed about 6,000 employees, or 8% of its workforce at the time. Intel said in April that it would slash up to 12,000 jobs globally, or 11 percent of its workforce.
