Tech giant Cisco to cut 4,000 jobs

NEW YORK CITY — Information technology giant Cisco announced Wednesday that it will cut 4,000 jobs, equal to five percent of its workforce.

Cisco executives said the cuts were necessitated by a weaker-than-expected economic recovery, with conditions especially disappointing in emerging markets.

The “economic recovery is slower and more inconsistent,” chief executive John Chambers told analysts.

While the US market has been getting better, that improvement is offset by “softening” in emerging markets, Chambers added.

Chambers emphasized the company’s need to “move fast” as it rebalances staff to meet growth areas. He said some of the downsized workers will undoubtedly be rehired in other posts.

“I have learned in this industry you lead with your mind, not with your heart,” Chambers said.

The cuts announced Wednesday came despite an 18.2 percent rise in earnings, and pushed Cisco shares 9.1 percent lower to $23.97 in after-hours trade.

Wednesday’s job cuts mark the third consecutive summer the company has downsized.

In July 2012, Cisco eliminated 1,300 jobs, citing global economic uncertainty. In July 2011, it eliminated 6,500 posts as part of a major company restructuring.

Cisco reported fiscal fourth quarter earnings of $2.3 billion on revenues of $12.4 billion, up from the year-ago level of $1.9 billion on revenues of $11.7 billion.

Per-share earnings exceeded analyst expectations by one cent at 52 cents per share.

Cisco officials signaled that first-quarter revenue growth will be in the 3-5 percent range, with earnings per share expected at 50-51 cents. The updated outlook was in line with analyst expectations, but a bit on the low end.

Cisco has been expanding its profile in some targeted growth areas such as cloud computing and Internet security with a run of recent acquisitions.

source: interaksyon.com

Cisco Still Pessimistic on Europe, Raises Dividend

(Reuters) - Cisco Systems Inc offered little hope that dire economic conditions in Europe would come to an end any time soon but pleased investors with a 75 percent dividend hike as the company posted quarterly results that beat estimates.

The world's largest network equipment maker had spooked investors three months ago, when Chief Executive John Chambers cautioned that macroeconomic conditions in Europe could hurt technology spending but now analysts expect Chambers to remain cautious.

Chambers said on a call with analysts that Europe would stay challenging over the next several quarters.

"That's probably going to get tougher before it gets better and that might last for a good little while," Chambers said, adding that public spending in the United States and Europe would remain weak.

As a result, Chambers said, "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."

Factoring that in, Cisco expects revenue growth, excluding items and its acquisition of TV software developer NDS, to range from 2 to 4 percent while earnings per share are seen up 5 to 0 percent at 45 to 47 cents, in line with analysts' expectations.

The San Jose, California-based company also said its dividend will rise to 14 cents per share in the first quarter of fiscal 2013 and that it plans to return a minimum of 50 percent of free cash flow annually through dividends and share repurchases.

Analysts welcomed the dividend hike but some wondered how revenue growth could be improved.

"It's a significant increase and now they've got a real yield," BGC analyst Colin Gillis said about the dividend, adding that he estimated the yield was at 3.2 percent versus 1.8 percent previously.

JMP Securities analyst Erik Suppiger said that while investors are happy that the spending cuts are boosting Cisco's profits, revenue growth is essential to the networking giant's long-term success.

"Ultimately the company needs to generate some acceleration in revenue growth," Suppiger said.

He added that it remains to be seen whether Chambers can get revenue growing again if he continues to cut spending, particularly sales and marketing.

Cisco kicked of a major restructuring program last year that included plans to slash about 15 percent of its work force and cut expenses by about $1 billion.

Last month it announced it would cut another 1,300 jobs across the company.

Cisco's fourth-quarter results beat estimates, thanks to cost savings and a continuing restructuring program.

Quarterly net income, excluding items, was $2.5 billion or 47 cents per share, compared with analysts' average estimate of 45 cents a share as compiled by Thomson Reuters I/B/E/S.

Revenue rose 4 percent from the year-ago quarter to $11.7 billion, compared with a Street view of $11.61 billion.

Cisco shares rose 5 percent to $18.23 after closing up 1 percent at $17.35 on Nasdaq.

source: nytimes.com

Busy Microsoft

MANILA, Philippines — We are about done with the first week of Lent, a period that was supposed to be slow and conducive for reflection.

Instead, we had more of the usual — reports of killing and dying, of thieving and lying, and of hurting and maiming. Maybe it is part and parcel of our season of passion to suffer, to be tortured by these developments that highlight our seeming powerlessness, our apparent inability to make any difference at all in the overall course of things.

But don't give up. Do hold on. Lent goes on for about five weeks more.

Heavy Week

Microsoft had an interesting week. First, Cisco Systems made it known that it plans to appeal the European regulators' approval of Microsoft's purchase of Skype. Senior vice president Marthin De Beer's post on his company's blog says that while they do not oppose the merger per se, they wish the European Commission would require Microsoft to offer "standards-based interoperability."

Bottomline of Cisco Systems' opposition to the Microsoft-Skype deal has to do with the impending marriage between Skype and Microsoft's Lync unified communications system. A Skype-Lync tandem would combine the best that consumer and business telephony systems offer.

Should a closed platform emerge from the merger (which most observers think will happen), Cisco Systems' competing technologies might get left out in the rain, cold and lonely.

Meanwhile, rumor mills have been busy. According to some "news leaks," Microsoft is reportedly preparing its Tango update for the Windows Phone 7 smartphone operating system. Russian Web site WP7Forum.ru has it that the update will endow the Microsoft mobile OS with features including the ability to manage contacts right there on the SIM card.

But the most exciting bit would be the Tango's ability to run on 256MB Windows Phone, which would be like Windows 8 running on a Pentium III PC.

Sony's Vita Push

Sony launched its PlayStation Vita handheld gaming platform in the United States and European markets last week. The basic, WiFi version is priced at $250, while the 3G-equipped edition goes for $300 and a monthly data fee from AT&T.

Sony is pushing the Vita with a $50 million marketing campaign.

Unlike with its PlayStation Portable experience, however, Sony is likely to find it hard to sell the Vita. After all, for quite so long now, consumers have been used to playing games on mobile phones and other handheld gadgets that aside from doing games can also perform other tasks, such as make phone calls, take photos, shoot videos, connect to the Web, and play digital songs.

So, the million-dollar question now is why would any game-loving consumer buy the PlayStation Vita when it makes much more sense to buy an iPhone, or any Android or Windows Phone 7 smartphone instead?

The Vita comes with a 5-inch screen, front- and rear-facing cameras, and is powered by a quad-core processor, which is also found inside the market's currently fastest tablet computers.

Certainly, the Vita launch means so much for Sony. After too many quarters of not so pleasant developments, Japan's electronics giant could use some good news.

This corner hopes enough numbers of mobile gamers fall in love with the latest portable gaming console from Sony.

That's all for the meantime, folks. Join me again next time as we keep on watching IT.

source: mb.com.ph