Cisco sees UC profits, but slowing future sales

On Wednesday, Cisco announced smoking growth in its Advanced Technologies and unified communication areas. However, the company is battening down its hatches with a hiring freeze and other cost-cutting measures in anticipation of a slower economy.

Advanced Technologies, which includes unified communications, wireless LAN, video, security and networked home products, was up 17 percent from last year, with a total of $2.7 billion in revenue. Of that, unified communications grew 22 percent, while security was up 19 percent from last year. Cisco believes it has the strongest positions in customer relationships in the enterprise and service provider markets.

Cisco's belt-tightening measures include the aforementioned hiring freeze, and cuts in travel, events and marketing expenditures. The company expects to trim expenses by $1 billion for its second quarter. Currently, U.S. orders are down 8 percent, with enterprise orders declining in the "high teens."

Revenues are expected to decline 5 to 10 percent in the second quarter but long term growth rates of 12 to 17 percent are still predicted.

For more:
- Network World dials in on Cisco's profits and future challenges. Article [1].