Cisco CFO Frank Calderoni interviewed with Yahoo! Tech Ticker’s Aaron Task this morning about our Q209 earnings report, which happened yesterday.Task writes:”In the accompanying video, Frank Calderoni, Cisco’s CFO, discusses how the company is weathering the economic storm and addresses the following issues:-How the deterioration in Cisco’s orders deteriorated in January vs. late 2008, leading to its grim forecast.-The lack of visibility in predicting when Cisco might return to its promised 12%-17% growth rate. -How Cisco is investing its huge cash horde.-If and when Cisco might join the mass-layoff parade.”
VIDEO: Cisco CFO Talks Q209 Earnings on Yahoo Tech Ticker
February 5, 2009 at 12:00 pm PST
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I’m believing that Cisco is in a good position to stop the downturn. But I’m sure that we will see the following things over the next quarters:- YtY growth rate at least -20%Cisco cannot change the world wide economy. The challenge is to be present in any area as smaller competitors can offer better deals. And the customer take care of any cents right now. Furthermore nearly every customer have a cut their investments and I’m not just talking about -20%.- mass layoffsI’m sure that mass layoffs are necessary to convince the shareholders and Cisco will do it. With a YtoY growth of -20% (-35% against plans) you can’t just decrease expenses. – 12%-17% growth rateThis is an illusion to think that this is possible every year. As every knows they economy is growing in a non-predicable way. I’m thinking meanwhile Cisco is to big for this rate.Furthermore I’m seeing the change in our company. We are not longer using just Cisco. In nearly every area we are implementing a second vendor and the customer don’t care (on most of the cases) if we are using Cisco or not. And we are talking of millions of dollar per quarter. What I’m also seeing is the dissatisfaction of the employees. It’s not just enough to reduce the revenue goal for the account teams. The feel the pressure and they can’t see any success right now. And in this period the company cut nearly every goodies. Finally, I’m sure that Cisco did not realize the whole downturn right now. It’s understandably that they have to be optimistic, but this doesn’t reflect the economy for the next quarters.