09 Nov 06. Cisco Systems Inc. posted a 28% jump in net income and a 25% increase in revenue for its fiscal first quarter, in a sign that its strategy of going beyond core networking gear is starting to yield some dividends. The company also projected that revenue in its current quarter ending in late January would rise 24% to 25%, far above the 10% to 15% revenue growth it has reported in recent quarters. Excluding revenue from Scientific-Atlanta, a cable-box business that it acquired earlier this year, Cisco forecast its revenue would rise 14% to 15% for the quarter. The rosy outlook and the strong quarterly results — analysts say the last time Cisco enjoyed such strong revenue growth was in mid-2004 — pushed Cisco’s shares up in after-hours trading. Cisco’s stock rose to $27.04, after closing up 26 cents to $25.10 at the 4 p.m. market close. Overall, Cisco’s shares have risen nearly 50% for the year and are trading at close to their highest level in two years. Cisco has recently placed big bets on services and products that utilize the network instead of just supplying networking gear. Mr. Chambers has said the company no longer wishes to be regarded as just a “plumber,” a nickname given to network infrastructure businesses. As a result, the company has recently introduced products beyond the networking realm such as a high-definition video conferencing system called Telepresence and an advanced office phone system called “Unified Communications.” It completed its $6.9bn acquisition of Scientific-Atlanta in February, and has also embarked on a new marketing campaign to redefine itself as more consumer friendly. In particular, Cisco’s acquisition of Scientific-Atlanta gives the company an opportunity to capitalize on companies that want to make cable upgrades and on telecom companies that are building out their networks to offer video. “It’s pretty clear their video strategy is succeeding,” said Eve Griliches, a research analyst with IDC. “Cisco has attempted to help service providers make money and not just add infrastructure.” For the three months ended October 28, Cisco posted net income of $1.6bn, or 26 cents a share, up from $1.3bn, or 20 cents a share, a year earlier. Revenue rose to $8.1bn from $6.55bn a year ago. Scientific-Atlanta notably contributed $584m in sales for the quarter. Cisco’s core switches and routers businesses, which still generate the bulk of the company’s revenues and profits, also showed growth. The routers business posted a 13% increase in revenue from a year ago, while the switching business generated a 15% increase in sales from a year ago. Revenue from Cisco’s Advanced Technologies unit, which includes Scientific-Atlanta as well as Internet telephony and wireless products, rose 23% for the quarter. (Source: WSJ)
13 Nov 06. Airbus is proposing to farm out an estimated $3.5bn worth of work on its proposed A350XWB airliner in an effort to reduce the overall development costs for its Franco-German parent EADS. Senior executives at the European aircraft group told the Financial Times that the company intended to increase the proportion of outsourcing on the airframe from about 30 per cent to close to 50 per cent. EADS has estimated that the A350XWB, Airbus’s response to Boeing’s popular 787 Dreamliner, will cost $12bn or more to develop, and is expected to decide whether to press ahead with the project in the coming weeks. A key factor in the decision will be the extent to which Airbus can cut development costs and prove that it has got to grips with the operational problems that have plagued its A380 superjumbo project, now running two years late.
13 Nov 06. Hitachi and General Electric will join forces to build, maintain and promote nuclear power plants around the world, becoming the third corporate pairing to emerge this year as part of a consolidation of the nuclear energy sector. The joint venture will yield two new companies – one based in Japan, the other in the US – owned by Hitachi