Cisco Systems pulled down a strong fiscal fourth quarter that saw a return to growth in its service provider segment, though the company continued to be nagged by the video side of the house.
Cisco, which is selling its set-top and CPE business to Technicolor for $600 million, said service provider video revenues were $994 million, down 7% from the year-ago period, and represented about 8% of overall revenues in the period. However, SP Video revenues were up 9% on a sequential basis, beating Raymond James analyst Simon Leopold’s estimate of $868 million.
Leopold reiterated that Cisco’s exit from the set-top box business did not come as a total surprise as the sector becomes more commoditized. “Overall, we see the [Technicolor] transaction impacting the top line but providing some upside to the bottom line as the company exits this competitive, low-margin business,” he wrote.
Cisco’s overall service provider segment rose 2%.
Switching, Cisco’s biggest bread winner, brought in $3.71 billion (representing 29% of overall revenues), up 2% year-on-year, while wireless revenues rose 7%, to $715 million.
Overall Q4 revenues reached a record $12.84 billion, up 4%, alongside earnings of 59 cents per share. Analysts were expecting 56 cents on revenues of $12.65 billion.
“While this is only my third week officially in the CEO role, we've really hit the ground running since my appointment was announced on May 4,” Cisco CEO Chuck Robbins said on the earnings call. “I believe that I'm stepping into this role at an incredible time for the company.”
Cisco shares were up $1.09 (3.89%) to $28.99 each in afternoon trading Thursday.