Business NEWS

Cisco and John T. Chambers: made for each other

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 6, 2008

Cisco (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its first quarter results for the period ended October 25, 2008. Cisco reported first quarter net sales of $10.3 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.37 per share, and non-GAAP net income of $2.5 billion or $0.42 per share.

“Cisco delivered solid revenue and earnings growth in what is clearly a very challenging global economy,” said John Chambers, chairman and CEO, Cisco. “Our strategy and focus for managing the business through this market transition is clear — we will manage and prioritize our resources, invest in innovation, and build even stronger relationships with our customers to help enable their success.”

Chambers continued, “The essential role that the network plays in driving business productivity and competitive advantage is more relevant than ever in this current macro-economic environment. Just as we helped our customers tap the productivity and competitive advantages afforded by the first wave of the Internet, once again we are leading the transition in this second wave to create new business models built for speed, scale, flexibility and productivity, enabled by the network.”

As previously disclosed, a tax benefit of $162 million or approximately $0.03 per share relating to a settlement of certain U.S. income tax matters was included in both the GAAP and non-GAAP results for the first quarter of the prior fiscal year. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.

Other Financial Highlights

– Cash flows from operations were $2.7 billion for the first quarter of     fiscal 2009, compared with $3.1 billion for the first quarter of fiscal     2008, and compared with $3.5 billion for the fourth quarter of fiscal 2008.
– Cash and cash equivalents and investments were $26.8 billion at the     end of the first quarter of fiscal 2009, compared with $26.2 billion at the     end of fiscal 2008.
– During the first quarter of fiscal 2009, Cisco repurchased 46 million shares of common stock at an average price of $21.95 per share for an aggregate purchase price of $1.0 billion. As of October 25, 2008, Cisco had repurchased and retired 2.6 billion shares of Cisco common stock at an average price of $20.62 per share for an aggregate purchase price of approximately $54.6 billion since the inception of the stock repurchase program. The remaining authorized repurchase amount as of October 25, 2008 was $7.4 billion with no termination date.
– Days sales outstanding in accounts receivable (DSO) at the end of the first quarter of fiscal 2009 were 29 days, compared with 34 days at the end     of the fourth quarter of fiscal 2008, and compared with 33 days at the end of the first quarter of fiscal 2008.
– Inventory turns on a GAAP basis were 11.9 in the first quarter of fiscal 2009, compared with 11.9 in the fourth quarter of fiscal 2008, and compared with 10.4 in the first quarter of fiscal 2008. Non-GAAP inventory turns were 11.6 in the first quarter of fiscal 2009, compared with 11.6 in the fourth quarter of fiscal 2008, and compared with 10.1 in the first quarter of fiscal 2008.

“Cisco’s solid financial performance this quarter reflected our ability to maintain profitability during a period of uncertainty,” said Frank Calderoni, chief financial officer, Cisco. “With a focus on making calculated investments in strategic areas, continued prudent expense management, and a historical strength of effectively managing our financial position, we believe Cisco is well positioned to manage our business model going forward.” Acquisitions and Investments

– In South Africa, Cisco announced a USD $27 million investment in the Cisco Innovation Hub Technology Centre.
– Announced Cisco’s intent to acquire Denver-based Jabber, Inc., a provider of presence and messaging software. Jabber is expected to enhance the existing presence and messaging functions of Cisco’s collaboration portfolio.
– Completed the acquisition of Mountain View, Calif.-based PostPath, Inc., a provider of innovative email and calendaring software. PostPath is expected to enhance the existing email and calendaring capabilities of the Cisco WebEx(R) Connect collaboration platform.
– Completed the acquisition of Seattle-based Pure Networks, Inc., a leader in home-networking-management software and tools. Pure Networks’ solutions are designed to allow users to easily set up and manage a home network and connect a range of devices, applications and services.

In Another news Cisco to Participate in Singapore’s Initiative to Create Next-Generation Public Transport System

Cisco (NASDAQ: CSCO) has announced that it will collaborate with the Singapore Land Transport Authority (LTA) to explore the potential of technology to deliver innovative services to commuters and transform the country’s public transport system. The collaboration, under the Singapore Urban Transport Solution initiative, aims to promote Singapore as a centre for research into world-class urban transport solutions, promote collaboration with leading research and industry partners, and build Singapore’s capabilities in the area of urban transport solutions.

The other participants in this initiative include the Economic Development Board of Singapore, the Infocomm Development Authority of Singapore, IBM, Singapore Technologies Electronics Limited and 3M Technologies (S) Pte Ltd.

Cisco brings to LTA several years of experience of working with Amsterdam, San Francisco, Seoul and other municipal governments to develop innovative urban communications infrastructures.

“Cisco is pleased to be selected by the LTA to participate in this landmark initiative. Singapore has been a pioneer in its adoption of information and communications technology, and the Singapore Urban Transport Solution framework is yet another area where the country could set the standard,” said Tom Cheong, Cisco’s managing director for Singapore and Brunei.

“With the Next-Generation National Broadband Network and the countrywide Wireless@SG, Singapore is using the network as a platform to change the way people work, live, play and learn. The end goal of it all is to establish Singapore as a great city with world-class infrastructure and services. This is a very strong message for the rest of the world,” he added.

Using the network as the platform, Cisco’s collaboration with Amsterdam, San Francisco and Seoul has resulted in some innovative applications for public transport. These are helping to deliver integrated services to residents, better manage traffic flow, increase efficiencies in public transport, and optimise real estate resources.

The Connected Bus, for example, a landmark prototype developed by Cisco and the San Francisco Municipal Transportation Authority (SFMTA), is a hybrid bus with a mobile hot spot that allows citizens to work while they ride. The Global Positioning System gives commuters an updated status of bus routes and connections; LED displays provide information on emissions saved through public transit; and an automated system reduces the environmental impact of the bus through better maintenance.

Another application that Cisco could bring to LTA’s Singapore Urban Transport Solution Framework is the Personal Travel Assistant (PTA). Developed with input from the Massachusetts Institute of Technology (MIT), PTA improves the transit experience within urban environments by empowering citizens to make more informed decisions on day-to-day transportation options based on schedule, financial and environmental implications. Accessible from any Web-based interface such as a mobile phone, PTA is the first service of its kind that provides green route options, integrates with other communication needs such as calendaring, and enables city agencies to predict and manage evolving citizen transportation needs more effectively. PTA is currently being considered by the city of Seoul for pilot testing.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com. Cisco products are supplied in Singapore by Cisco Systems International, BV, a wholly owned subsidiary of Cisco Systems, Inc.

Cisco, the Cisco logo, and Cisco Systems are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

Cisco CEO John T. Chambers’ views on the economy

The following is a selection of his comments since mid-2007. by reuters

NOV. 5, 2008

“We do believe that the challenges that initially affected the U.S. have spread to other countries around the world,” he told analysts on a conference call. He forecast that fiscal second-quarter revenue would decline by 5 percent to 10 percent from a year earlier, but said it was hard to be sure.

“It’s probably the second most difficult time in my career in terms of my comfort level with the forecast,” he said.

SEPT. 16, 2008

Chambers told a financial analysts meeting that Cisco was sticking to its goal of 12 to 17 percent annual revenue growth despite the slow economy. “We’ve never been more comfortable with our 12 to 17 percent growth long-term projection than we are right now,” he said.

Aug. 5, 2008

“While it is very difficult to predict when we may see a stronger spending environment by our customers and return to our 12 percent to 17 percent long-term growth objectives, our best estimate … is that the current economic challenges (will) remain with us for the next few quarters.”

“Our U.S. enterprise was stronger than we expected this quarter. Our U.S. service provider was a little bit weaker.

“But if I look at the total global scenario, (the downturn) is probably going to be a little bit longer than we would have said six months ago. But still, most of my customers see it turning early next year and … we’re budgeting that way.”

May 6, 2008

“In terms of what we’re hearing from our customers, most of them believe that this (slowdown) will be a relatively short-term phenomenon,” Chambers told Reuters in an interview after announcing the company’s third-quarter results.

“Most of my customers believe their business will be coming back up by the end of the year and therefore spending that is tied to their economic scenario should pick back up as well.”

Feb. 6, 2008

Chambers warned that orders slowed rapidly from December to January in the United States and Europe. “It’s the most cautious I’ve seen CEOs in the U.S. and Europe in many years,” he said, citing softness at retailers and transport companies in the United States and at European service providers.

Nov. 7, 2007

Chambers warned of “dramatic decreases” in orders from U.S. banks. “The U.S. enterprise, probably as a surprise to no one, is experiencing some softness,” he said, blaming the automotive sector as well as banks. He said he expected the U.S. enterprise segment to remain “lumpy.”

Aug. 7, 2007

“I have been in this business for 30 years…. It’s the strongest global economy I have been a part of,” he told analysts on a conference call.

John T. Chambers
Chairman and Chief Executive Officer
Cisco

John Chambers is Chairman and CEO of Cisco. He has helped grow the company from $70 million when he joined Cisco in January 1991, to $1.2 billion when he assumed the role of CEO, to its current run-rate of approximately $40 billion. In November 2006, Chambers was named Chairman of the Board, in addition to his
CEO role.

Chambers has received numerous awards for his leadership over his past 13 years at the helm of Cisco, including: Time Magazine’s “100 Most Influential People,” one of Barron’s’ “World’s Best CEOs,” the “Best Boss in America” by 20/20, one of BusinessWeek’s “Top 25 Executives Worldwide,” “CEO of the Year” by Chief Executive Magazine, the Business Council’s “Award for Corporate Leadership,” and “Best Investor Relations by a CEO” from Investor Relations Magazine three times. During his tenure as CEO, Cisco has been named to Fortune’s “America’s Most Admired Company” list seven times, BusinessWeek’s “Top 50 Performers” list six times, Forbes’ “Leading Companies in the World,” and is one of the top 10 places to work in the U.S., China, Germany, France, India, UK, Australia, Singapore and several other countries.

In addition, Chambers has been widely recognized for his and Cisco’s philanthropic leadership, recently receiving the first-ever Clinton Global Citizen Award from former U.S. President Bill Clinton, and the U.S. State Department’s top corporate social responsibility award from Secretary of State Condoleezza Rice. He has also been awarded the Woodrow Wilson Award for Corporate Citizenship, and the prestigious Excellence in Corporate Philanthropy Award, an award given by CEOs to their CEO peers.

Chambers takes an active role in corporate social responsibility initiatives worldwide, which most recently includes forming a public-private partnership to help rebuild healthcare and education models in the Sichuan, China region impacted by the May 2008 earthquake. Chambers also co-sponsored the Jordan Education Initiative, which Cisco has worked on in partnership with His Majesty King Abdullah II of Jordan and the World Economic Forum. Additionally, in late 2006, Chambers co-led a delegation of U.S. business leaders, in partnership with the U.S. State Department, to form the Partnership for Lebanon, helping provide critically needed resources for ongoing reconstruction in Lebanon. Chambers has also spearheaded several other education initiatives, including the 21st Century Schools initiative, to improve education and opportunity for children in the Gulf Coast Region affected by Hurricane Katrina.He has served two American presidents; most recently as Vice Chairman of the President George W. Bush National Infrastructure Advisory Council (NIAC), where he provided industry experience and leadership to help protect the United States’ critical infrastructure. He also served on President George W. Bush’s Transition Team and Education Committee, and on President Bill Clinton’s Trade Policy Committee.

Chambers joined Cisco in 1991 as Senior Vice President, Worldwide Sales and Operations. He assumed the role of President and CEO in 1995. Prior to joining Cisco, he spent eight years at Wang Laboratories (1982-1990) and six years with IBM (1976-1982). He holds a law degree (1974) and a bachelor of science / bachelor of arts degree (1971) in business from West Virginia University and a masters of business administration degree in finance and management (1975) from Indiana University. He is married and has two adult children.

JOHN CHAMBERS / CISCO AWARDS

Corporate Citizenship

“Clinton Global Citizen Award,” for private sector, Clinton Global Initiative (2007)
“Award for Corporate Excellence,” U.S. State Department (2005)
“Excellence in Corporate Philanthropy Award,” Committee to Encourage Corporate Philanthropy (2005)
“Woodrow Wilson Award for Corporate Citizenship,” Woodrow Wilson Center for International Center for Scholars of the Smithsonian Institution (2004)
“International Community Service Award,” US Chamber of Commerce, Business Civic Leadership Center, (2007)
“Award for Excellence in Workplace Volunteer Programs,” Points of Light Foundation (2005)
“Top 100 Best Corporate Citizens,” Business Ethics Magazine (2001-2006)
“America’s Most Generous Corporations, Best Company in World, Network Systems,” Forbes (2003)
“20th Anniversary Leadership Award,” City Year (2008)Executive Leadership
“World’s 100 Most Influential People,” Time Magazine (2008)
“World’s Best CEOs,” Barron’s top 30 list (2008)
“Best Boss in America,” 20/20 (2000)
“25 Most Powerful People In Business,” Fortune (2008) Top 10 “CEO Vision Award”, InternetNews.com (2008)
“Top 10 Most Influential Leaders Shaping Technology,” Time Digital (2000)
“Mr. Internet,” Top 25 Executives Worldwide, Business Week (1999)
“CEO of the Year,” Chief Executive Magazine (2000)
“Award for Lifetime Achievement,” PricewaterhouseCoopers (1999) Three-time winner
“Best Investor Relations by a CEO,” Investor Relations Magazine (2002, 2004, 2007)
“Internet Industry Leader Award,” U.S. Internet Council (2000)
“Gala Award Honoree,” American India Foundation (2007)
“#2 CEO in America,” Worth Magazine (2000)
“Presidential Award: Ron Brown Award for Corporate Leadership,” The Business Council (2004)
“Business Leadership Award,” NASSCOM (India) (2007-08)
Six-time winner, “Best CEOs, Telecommunications, Data Networking,” Institutional Investor Magazine (2003-2008)

Company Leadership

Top 10 in “100 Most Respected Companies,” Barron’s (2007)
“America’s Most Admired Companies, All Industries” Fortune (#4 in 2000, #2 in 2001, #18 in 2008)
“America’s Most Admired Companies, Network Communications,” Fortune (#2 in 2002, #1 in 2003, #2 in 2004, #2 in 2005, #2 in 2006, #1 in 2007, #1 in 2008)
Best Network Infrastructure Firm, Waters (2008)
“Top 100 Brands, #18,” BusinessWeek (2006)
“#1 Stock of the Decade,” CNN (1999)
Nine-time winner, “Best Big Companies in the World,” Forbes (1999-2001, 2003-2008)
“40 Most Innovative Companies on Earth,” Wired (2006)
“America’s Most Shareholder-Friendly Companies, #1 Telecommunications,” Institutional Investor Magazine (2006, 2007)
Five-time winner “World’s Best Companies: Network Systems,” Global Finance (2001-2005)
“Industry Hall of Fame Award,” Channel Reseller News (2002)
“Forbes Global 2000: World’s Leading Companies,” Forbes (2003-2008)
“Forbes 500,” Forbes (1997-2003)
“International Partner Award,” California Israel Chamber of Commerce (2005)
“#13 and #16 of the Top 25 Products of the Past 25 Years,” eWeek (2006)
“Excellence and Innovation Award,” Fortune (2004)

Public Service

Vice Chairman, President George W. Bush National Infrastructure Advisory Council (NIAC)
Member, President George W. Bush Transition Team, Education Committee
Member, President Bill Clinton Trade Policy Committee
Diversity and Employee Relations
Cisco awarded on of the top places to work in countries around the world, including:
Australia: “#1 Best Employer in Australia,” Hewitt Associates (2001); “Best Employers in
Australia: Highly Commended,” Hewitt Associates (2007)
Belgium: “#1 Great Place to Work in Belgium,” Great Place to Work Institute (2008)
The Kingdom of Saudi Arabia: “#1 Best Saudi Company to Work For,” TeamOne Consulting /
Saudi Research and Publishing Group (2007)
Spain: “#3 Best Company to Work for in Spain,” Actualidad Economica (2008)
Europe: “#3 Best Workplaces In Europe,” Great Place to Work Institute (2008)
India: “#5 Best Employers in India,” Hewitt Associates (2007)
Norway: “#7 Best Place to Work in Norway,” Great Place to Work Institute (2008)
France: “#7 Great Place to Work in France,” Great Place to Work Institute (2008)
Germany: “#11 Great Place to Work in Germany,” Great Place to Work Institute (2007)
Italy: “#11 Great Place to Work in Italy,” Great Place to Work Institute (2008)
UK: “Top 15 Best Places to Work in the UK,” Sunday Times (2002, 2003)
Asia: “#17 Best Employer in Asia,” Hewitt Associates (2007)
Canada: “The Best Employers in Canada,” Hewitt Associates (2004, 2005)
US: “Top 100 Best Places to Work in America,” Fortune (1998-2008)
Latin America: “Top 25 Best Places to Work in Latin America,” Hewitt Associates / AméricaEconomía (2006)
China: “Most Respected Companies of China” (2007)
“Working Mothers 100 Best Places to Work,” Working Mothers Magazine (2001-2005, 2007)
“100% on Corporate Equality Index,” Human Rights Campaign (2004-2007)
“Best Companies to Start a Career,” BusinessWeek (2007)
“Best Employers for Healthy Lifestyles: Gold Ranking,” National Business Group on Health (2007)
“50 Best Companies for Minorities,” Fortune (2002, 2005)
“Corporation of the Year,” Frederick D. Patterson Award, United Negro College Fund (2004)
“Spirit of Achievement Award,” National Center for Learning Disabilities (2002)
“America’s Top Organizations for Multicultural Business Opportunities,” DiversityBusiness.com (2003-2006)
“40 Most Admired Companies For Hispanics,” Hispanic Network Magazine (2006)
“Above and Beyond Award,” Employer Support of the Guard and Reserve (2003)

Author : Amarendra Bhushan

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