Cisco today reported first-quarter results, for the period ended Oct. 29, that were in line with expectations. But its guidance for the second quarter was downbeat.
The company reported first-quarter revenue of $12.4 billion and non-GAAP net income of $3.1 billion or $0.61 per share. This represents growth of 1 percent year over year, in line with its guidance.
Looking ahead to its second quarter of fiscal 2017, though, Cisco is predicting a revenue decline of 2 percent to 4 percent compared to the same quarter in 2016. And it’s projecting non-GAAP earnings per share of $0.55 to $0.57.
Asked about the company’s financial prospects in light of a Trump presidency, Cisco CEO Chuck Robbins said there’s too much uncertainty at this point in terms of the political and regulatory environments. “We’re not going to model any improvement there for the guide,” said Robbins.
During the presidential election, Donald Trump advocated for a one-time repatriation tax of 10 percent, which is significantly lower than the current rate of 35 percent. That tax could be a boon to Cisco, which apparently has about $50 billion in off-shore funds. Robbins said he has spoken with other tech company CEOs, noting,“We’re focused on the policy issues that matter to each of our companies.”
Breaking out its total revenues, Cisco’s product revenue dropped 1 percent during the quarter, while its service revenue rose 7 percent.
The company has been placing a lot of emphasis on its security portfolio, and today it reported that although its overall product revenue dropped, security, which is in that segment, increased 11 percent. Cisco CEO Chuck Robbins said this is the fourth consecutive quarter in which security garnered double-digit growth.
The company also recapped the acquisitions it closed during its first quarter:
Heroik Labs, doing business as Worklife — a company that provides software to improve meeting productivity.