Networking leader Cisco have announced that their Q2 results have outperformed Wall Street expectations significantly, with net income going up by 40 cents per share.
The revenue for the second quarter stood at USD 2.18 billion with earnings touching 47 cents per share. The overall grossed margins for Cisco's highly valued Services business moved up to 66 per cent whilst revenue margins for products were fairly stable at 60 per cent. The improved performance at Cisco is seen as a reflection on the turnaround plan initiated by its CEO John Chambers, and although strongly criticised its harsh regime, has delivered impressive results. The company has gone for drastic job cuts as well as trimming down hierarchy levels in an effort to minimise costs, however, Cisco still remains the largest employer in Silicon Valley with nearly 17,000 employees on its payroll.
Expressing his satisfaction at the development, Seeking Alpha quoted Mr. Chambers as saying: "We achieved our goal of $1 billion expense reductions measured from a quarterly run rate perspective in the second quarter one quarter earlier than our stated goals."
The improved performance from Cisco comes shortly after practising a new aggressive marketing posture wherein it is targeting customers by offering competitive prices. Cisco initiated layoffs, and shed unprofitable business units in a bid to enhance its revenue.