Cisco Reports Q4 Earnings

Cisco Systems (Nasdaq: CSCO) today reported its fourth quarter and fiscal year results for the periods ended July 31, 2004. Net sales for the fourth quarter of fiscal 2004 were US$5.9 billion, compared with $4.7 billion for the fourth quarter of fiscal 2003, an increase of 26 percent, and compared with $5.6 billion for the third quarter of fiscal 2004, an increase of 5.4 percent.

Net income for the fourth quarter of fiscal 2004, on a generally accepted accounting principles (GAAP) basis, was $1.4 billion or $0.20 per share, compared with $982 million or $0.14 per share for the fourth quarter of fiscal 2003, and compared with $1.2 billion or $0.17 per share for the third quarter of fiscal 2004.

Pro forma net income for the fourth quarter of fiscal 2004 was $1.5 billion or $0.21 per share, compared with $1.1 billion or $0.15 per share for the fourth quarter of fiscal 2003, and compared with $1.4 billion or $0.19 per share for the third quarter of fiscal 2004.

Record-Breaking Quarter for Cisco

"This was a record-breaking quarter for Cisco on a number of financial and operational levels, including generating the highest GAAP and pro forma net income and earnings per share in the company's history," said John Chambers, Cisco president and CEO. "The investments we've made in emerging markets around the world, coupled with continued innovation in our core business and advanced technologies, are generating record results."

Chambers continued, "Fiscal 2004 has truly been a breakaway year for Cisco. Our strategy has produced solid results across multiple categories, with profitable growth generation resulting in a year-over-year increase in quarterly revenue of 26 percent, strong balance across market segments and geographies, as well as clear momentum in multiple product categories and our Advanced Technology markets."

Financial Highlights

Cash flows from operations were $2.1 billion for the fourth quarter of fiscal 2004, compared with $1.5 billion for the fourth quarter of fiscal 2003, and compared with $2.4 billion for the third quarter of fiscal 2004.

Cash flows from operations were $7.1 billion for fiscal 2004, compared with $5.2 billion for fiscal 2003. Cash and cash equivalents and total investments were $19.3 billion at the end of fiscal 2004, compared with $20.7 billion at the end of fiscal 2003 and compared with $18.9 billion at the end of the third quarter of fiscal 2004.

"We saw solid progress during the quarter on key operational milestones," said Dennis Powell, Cisco CFO. "We marked the ninth consecutive quarter of pro forma net income exceeding $1 billion, generated more than $2 billion in cash flow from operations for the second consecutive quarter, and are close to achieving our productivity targets with pro forma operating expenses to revenue at 36 percent."