Cisco needed a big earnings report and the company delivered.
Cisco reported 40 cents a share against the 35 cents expected; but arguably the bigger story here is the significant beat on the topline: Cisco reported $9.8 billion versus the $9/.4 billion expected.
That's impressive and gives investors the strongest sign yet that the enterprise may finally be spending again.
Equally impressive: Cisco's $39.6 billion in cash in the bank. That's about $5 billion better than this company had just a quarter ago. Cash flow from operations jumped a cool billion dollars, to $2.5 billion from the $1.5 billion the company reported in its fiscal first quarter. While the figure is still below the $3.2 billion reported in the second quarter of last year, it's a big indication that this company is firmly on the improvement path.
All of this bodes particularly well for Cisco for the rest of the year, and that's why CEO John Chambers' comments on the call will be so important tonight.
Was this a one-time blip (unlikely), or is this the beginning of a pretty good bump in enterprise spending (far more likely.) Also, with nearly $40 billion in cash in the bank, competitors like IBM and Hewlett-Packard have to be sweating. A warchest this massive let's Cisco go wherever it wants, buy whoever it wants, develop anything it wants, and with corporate spending on the rise, Cisco's coffers will swell only more.