Cisco Slips in 2Q17 as Switching Weakness Continues

Thursday Feb 16th 2017 by Sean Michael Kerner
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A real bright spot for Cisco is its security portfolio, which continues to grow.

Cisco reported its second quarter fiscal 2017 revenue on Feb. 15, showing some weakness in the company's switching portfolio and continued strength in security.

For the quarter, Cisco reported revenue of $11.6 billion, for a two percent year-over-year decline. Net income was $2.3 billion, for a 25 percent decline from the second quarter of 2016. Looking forward, Cisco isn't optimistic for any growth in the third quarter, with revenue guidance in the range of minus 2 percent to 0 percent year-over-year.

"In our core business, the network has never been more relevant in a world of increasing connectivity driven by cloud, social, IoT and digitization," Cisco CEO Chuck Robbins said during his company's earnings call.

In particular Robbins called out Cisco's advanced threat solutions as a real strong point. He noted that Cisco added over 6,000 new security customers, which helped to contribute to advanced threat solutions revenue growth of 65 percent in the quarter.

Robbins also noted that Cisco added over 5,500 next-generation firewall customers, bringing the security total customer base to 67,500.

Looking at Cisco's Application Centric Infrastructure (ACI) Software Defined Networking (SDN) technologies, Robbins said revenue was up by 28 percent.

The weak point for Cisco was once again the overall switching portfolio number, with revenue down by five percent. Cisco attributed the decline in switching revenue to weakness in its campus switching portfolio.

On a positive note, Cisco reported that its wireless product revenue grew by three percent, thanks to the continued strong adoption of technologies from the Meraki set of products.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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