/// Five Questions for Cisco Systems CEO John Chambers
Today’s results from Cisco Systems came in almost exactly on target with the consensus of Wall Street analysts, which, given how bad things were one and two years ago, amounts to progress. But after a major company-wide restructuring and the divestiture of several non-core businesses, CEO John Chambers (pictured here at D5) is finding that turning the massive Cisco ship around — something he seemed to have started two quarters ago, and which continued last quarter, isn’t coming easy. There’s the global economy to worry about. All that messy complicated news coming out of Europe about sovereign debt and cuts in government spending around the world has a way of eating into technology budgets both at Cisco’s government customers and at its large enterprise customers. Cisco’s guidance for the quarter ending in July was especially worrisome for investors, who promptly sent Cisco’s share price plummeting by more than 8 percent in after-hours trading. Cisco called for revenue to grow between 2 percent and 5 percent, which works out to sales in the range of $11.4 billion to $11.8 billion, well off the consensus forecast of $12 billion. Guidance on earnings was equally disappointing. At 44 cents to 46 cents a share, the midpoint lags the consensus by two cents. So what’s going on? I asked Chambers about it in a phone interview with AllThingD held after the conclusion of Cisco’s conference call with analysts. AllThingsD: John, the markets clearly don’t like very much what they saw today. So, from a high level, what happened — good, bad and indifferent — with this quarter? Chambers: The first thing from a high level is that we’re executing pretty well on our vision and strategy, and we did exactly what we said we would do. We guided for growth of 5 percent to 7 percent for the year and for the first nine months we’re at 7.5 percent [revenue].