Cisco, networking equipment vendor, on Wednesday said its India revenue declined 18 percent in the first quarter of fiscal 2014.
However, Cisco CEO John Chambers says it will continue to focus on emerging markets. India is not the only country to record drop in first quarter revenues.
Cisco’s top five emerging markets declined 21 percent with Brazil down 25 percent, Mexico down 18 percent, India down 18 percent, China down 18 percent and Russia down 30 percent. “We will continue to focus on emerging markets, investing through the challenges and expect to see return to growth in few quarters with all the appropriate caveats,” Chambers said.
The first quarter revenue of Cisco dipped 1.8 percent to $12.1 billion. Its net income decreased 4.6 percent to $2 billion.
During an analyst call, Cisco CEO said the company would consider China as a very important market and Huawei as an aggressive competitor.
The networking vendor said emerging markets orders declined 12 percent and service provider orders declined 13 percent. As a result, total product orders declined 4 percent year-over-year with total product book-to-bill of less than one.
Other regions also did not support Cisco. Revenues in the Americas declined 2 percent. Service provider in the U.S. declined 10 percent.
Asia-Pacific, Japan and China was down 10 percent.
The Europe, Middle East, Africa and Russia region declined 4 percent, due primarily to the effect of the emerging markets public sector and SP. Central Europe continued to show positive growth. Southern Europe continues to be challenging. Europe, while there are positive trends remain challenging as seen in the recent ECB interest rate reduction announced last week.
Cisco is not expecting a better second quarter. “We expect total revenue to decline in the range of 8 percent to 10 percent on a year-over-year basis. For the second quarter we anticipate non-GAAP product gross margin – non-GAAP margin to be in the range of 61 percent to 62 percent. Our non-GAAP operating margin in Q2 is expected to be in the range of 27.5 percent to 28.5 percent,” Chambers added.