Cisco predicts 'challenging' Europe
CISCO SYSTEMS offered little hope that dire economic conditions in Europe would come to an end any time soon, but pleased investors with a 75 per cent dividend rise as it posted quarterly results that beat estimates.
The world’s largest network equipment maker had scared investors three months ago when chief executive John Chambers cautioned that conditions in Europe could hurt technology spending, but now analysts expect Mr Chambers to remain cautious.
He said on a call with analysts that Europe would stay challenging over the next several quarters. As a result “many of our customers continue to anticipate a challenging next 12 months on a global basis, and therefore these CEOs will remain conservative both in their IT expenditures but also in their hiring”.
The company said its dividend would rise to 14 cent per share in the first quarter of fiscal 2013, and that it plans to return a minimum of 50 per cent of free cash flow annually through dividends and share repurchases. Quarterly net income, excluding items, was $2.5 billion. Revenue rose 4 per cent from the year-ago quarter to $11.7 billion. – (Reuters)