Cisco has risen after sales and profits exceeded analysts’ estimates. Profits, not including certain costs were 40 cents per share in the 4th quarter which ended in July 30th. Analysts had only predicted 38 cents per share. Sales went up by 3.3 percent in the fourth quarter.
Cisco has a plan to cut expenses by firing and early-retirements of about 6,500 workers globally and by ending the Flip video camera unit. Cisco will focus more on its more profitable products which are switches and routers. The company also sold a Mexican Plant to cut back and is concerned that global economic distress may cause a drop in demand for high tech products.
From a marketing perspective, Cisco has lost 5.8 % of global switching revenue but still controlling 68.5 % of the market. Router sales also dropped by 6.4% of the market leaving them with a 54.2 % market share. To regain market share Cisco has added new products, such as upgrades to its switches, to handle greater video and data traffic. Other new products offer greater security and effectiveness in cloud networks.